Glossary
What is a shortage risk? How to spot parts that will run short
Shortage risk: A shortage risk is a part whose usable stock will run out before the next open order for it arrives, or that has no open order at all.
By Roufaida Bouchamha, founder
The definition
A part is a shortage risk when the stock you can use today will be consumed before the next supply arrives. That happens in three situations: the next open order arrives after cover runs out, the next order has no date, or there is no open order at all while the part keeps being used.
How to find shortage risks
- Compute [days of cover](/resources/glossary/days-of-cover) for every active part.
- Find the next open order for each part and the date it will really arrive (the supplier's latest promise, not the original request).
- Compare: if the arrival date is later than today plus cover, the part is a shortage risk.
- Add the parts below [reorder point](/resources/glossary/reorder-point) with no open order: they are risks by definition.
Shortage risk versus below reorder point
A part below reorder point is not always at risk: an order may already be on the way and arrive in time. A part above reorder point can still be at risk if its only open order is very late. Shortage risk combines stock, usage and supply dates; reorder point alone looks only at stock.
Illustrative example, not a customer result
A coupling has 15 units and uses 5 a day: 3 days of cover. Its only order was due last week and has no new date. It is a shortage risk. A fitting has 40 units and uses 2 a day: 20 days of cover, with an order due in 6 days. It is below reorder point but not at risk.
What to do with a shortage risk
- Chase the order with the evidence (see chase list).
- Check alternative stock at another site or an alternative part.
- Tell planning early so they can resequence if the date cannot move.
- After the event, check whether the reorder point or lead time needs updating.
How WERISCO uses it
WERISCO shows parts that will run short, ranked by days of cover, and the late or undated supplier orders behind them, from your ERP or your exports. It does not predict supplier delays; it works from the dates you have. Your team decides; nothing is written back to your ERP. See the parts below reorder point morning routine.
Questions people ask
- Is every part below reorder point a shortage risk?
- No. If an open order will arrive before cover runs out, the part is below reorder point but not at risk.
- Does a shortage risk mean production will stop?
- It means the part will run out before supply arrives. Whether a line stops depends on which work orders use the part, which your planners know from the bill of materials.
- How far ahead should I look?
- At least as far as the longest supplier lead time on the parts you review, because anything shorter can no longer be fixed by a new order.
