Reorder Points for China Sourcing: From Factory Lead Time to Saleable Stock

1. Define the trigger in units

A simple planning formula is reorder point = average daily demand × replenishment lead time + safety stock. Keep the demand and lead-time units consistent. The result is a quantity of a specific SKU or variant, not a calendar date and not the quantity of a purchase order. Shopify’s reorder point guide introduces the underlying calculation.

For a China-sourced SKU, decide where replenishment must end: ready to pick in China, or ready to sell from an overseas warehouse. Mixing these two end points hides time in the calculation. The planning horizon should match the actual stock location serving the customer.

Use a stated period of sales data and note promotions, unavailable days and unusual bulk orders. Sales recorded during a stockout can understate demand. Treat a new product separately rather than assigning a precise forecast to a SKU with little evidence.

2. Map every handoff to saleable inventory

Measure elapsed time from the purchase decision to usable inventory, including waiting between stages. Keep supplier promises separate from observed completion dates. If an overseas warehouse is the stock point, include the relevant destination process; if China stock is the end point, do not add an international journey that has not happened yet.

Review the slow handoffs with the people who own them. An inspection failure may create a different replenishment delay from a missed departure. Recording both helps the team decide whether to change the purchasing date, prepare documents earlier or split a critical replenishment.

3. Use a worked example and check inventory position

Illustrative inputs: 24 units of average daily demand, 26 days from order placement to saleable stock, and a selected buffer of 120 units. The reorder point is 24 × 26 + 120 = 744 units. The buffer is a planning assumption for this example, not a recommended setting for every store.

Compare like-for-like stock records. A simple inventory-position view is usable on-hand stock + confirmed inbound stock − customer commitments. For example, 500 + 200 − 80 = 620 units. That is below the illustrative threshold and calls for a replenishment review. Verify that the 200 inbound units are genuinely confirmed and scheduled to arrive before they are needed.

Do not count damaged, quarantined or already-allocated units as freely available. A future purchase order cannot prevent a near-term stockout if it arrives too late. Check the dates of incoming supply alongside its quantity, especially when orders are waiting or a campaign is approaching.

4. Separate when to order from how much to order

After a trigger is reached, determine order quantity using the purchasing plan, existing open orders, minimum order quantities, carton multiples and available storage. A reorder point of 744 units does not mean buying 744 units every time. Keep the trigger and the purchase decision in separate fields.

• Calculate by variant before rolling up to a product family.
• Review supplier lead times when a production plan changes.
• Recheck demand assumptions before a promotion or seasonal peak.
• Record who can approve an urgent split shipment or a changed purchase quantity.

Track the exception that caused each intervention rather than adding more buffer without explanation. Better carton data, an earlier inspection booking or clearer receiving records may address a recurring delay more directly. Our China sourcing and fulfillment overview shows how these operating steps connect.