10-Step Order Card Startup Guide

Overview

Whether it’s printer paper, cleaning supplies, aluminum stock, or solar panels, your business relies on countless supplies to keep operations running smoothly, and managing your inventory of those items generally takes a lot time. While the things that you do with those supplies creates a lot of value for your customers, the time you spend on ordering and inventory management does not. If you asked your customer if they want to pay an extra $1 for you to place orders for paper towels, they’d say no. Any time not spent adding value for your customer is waste, and that labor should be reallocated to value-add tasks.

Many businesses are unaware that they lack a time-efficient inventory management strategy, leading to 20-30% of their workforce's time being spent on inefficient stock management activities. Without a proper system, teams waste significant time manually checking stock levels, making ad-hoc orders, and dealing with supply shortages, which disrupts other tasks. This guide offers a 10-step plan to refine your order and inventory processes, cutting out non-essential activities and freeing up 20-27% of your time. This extra time can be redirected towards value-adding activities like product development, manufacturing, sales, and customer service, enhancing overall customer value.

Step 1 - Go from Zero to One

The goal of the first pass on your inventory is to add an order card to as many things as possible. Adding an order card to supplies, even imperfectly, will reduce the time your spend on inventory management and reordering by about 90%. The biggest early failure mode or frustration point that we see is when companies try to get everything right on their first go-around and make perfect the enemy of good. All you want to do in step 1 is add order cards to supplies that are essential for your business so that they won’t run out and you can re-focus your time on your business’s unique-value-add. Check out our post about

The Three Types Of Inventory⁠

to help you determine which supplies you should focus on in your first pass.

Step 2- Separate Your Minimum Inventory

Once you’ve added order cards to the majority of your supplies, begin to get a rough idea of how much of each item you’ll use in the amount of time it will take to get more supplies in from that vendor. Once you’ve figured that out, add in a few extra supplies for some buffer time, and that’s the minimum number you should keep on hand. That’s it. Start there, and adjust later when you have more data. Again, the theme here is keep it simple. Some of our go-to methods are putting the minimum quantity in a ziplock bag, a separate bin, or a physical divider in one bin with the order card. This creates a physical reminder for folks on the shop floor to find the card and place it in the “to order” bin.

Step 3- Make Restocking Easy

Some people get caught up in theory here but easy is good. If you’re creating an order card for printer paper for example, 50 sheets of paper plus a 15 sheet buffer might be theoretically enough paper to last till a new ream arrives, but given that paper is fairly inexpensive and splitting a ream up into different stacks is tedious work, it will be much easier to set your minimum to 1 ream. If items come in bags of 25, make the minimum some multiple of 25. The goal of systemizing your inventory is reducing the amount of time you’re spending on non-value-add activity, so don’t make it harder than it needs to be.

Step 4 - Don’t Radically Reduce Your Stock… Right Away

When beginning to implement an inventory management system, resist the urge to drastically cut down your inventory levels immediately. This cautious approach ensures that you understand your consumption patterns thoroughly before making significant adjustments, thereby avoiding the risk of stockouts that could disrupt your operations.

Step 5 - Create a Two-Bin System

Where possible, a two-bin system is a very powerful and space-efficient system that is our go-to where order quantities allow. This is where you have one bin, shelf, or area that you’re picking from, and an additional bin behind or next to that has your minimum inventory and an order card. When the bin you’re picking from is depleted, you pull the other bin out, the card triggers a reorder, and when the new stock arrives, there’s an empty bin ready to be restocked.

Step 6 - Leave Space for Replenishments

This is often overlooked but is important so that items go in the same place every time. Lots of time can be lost to people asking where to find the new stock. We need to plan for where we put standard items when they come in.

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Step 7 - Don’t Order Without a Card

This is the best way we’ve found to transition to using order cards. Every time an item comes up for reorder, take the extra couple of minutes to create the card. If you make exceptions to this rule, it will slow down your transition to a systemized approach to inventory management.

Step 8 - Wait to Buy Expensive Hardware

Initially, resist the urge to invest in expensive bins or storage solutions for your inventory management system. Start with what you have or opt for cost-effective alternatives until you've thoroughly tested and refined your system.

Step 9 - Add Visual Controls

Use visual cues like example parts, color coding and signs to create an intuitive system that minimizes errors and training needs.

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Step 10 - Conveniently Place “To Order” and “Ordered” Bins In Your Space

These are physical bins in places around the shop that workers can drop order cards into as they come across them. From there, the cards get gathered, scanned, and added to the Arda cart. From the shop’s perspective, they can now be placed in the “ordered” bin as they have conceptually been ordered from the purchasing department (even if these are the same people). Keep these bins in accessible locations to facilitate a smoother inventory management workflow.

Overview

Step 1 - Go from Zero to One

Step 2- Separate Your Minimum Inventory

Step 3- Make Restocking Easy

Step 4 - Don’t Radically Reduce Your Stock… Right Away

Step 5 - Create a Two-Bin System

Step 6 - Leave Space for Replenishments

Step 7 - Don’t Order Without a Card

Step 8 - Wait to Buy Expensive Hardware

Step 9 - Add Visual Controls

Step 10 - Conveniently Place “To Order” and “Ordered” Bins In Your Space

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