Forward Stocking Location Definition

Finding the Actual Definition

We recently had a discussion which involved the topic of a forward stocking location. We decided to look up this term and did not find very much about it. None of the major sites such as Wikipedia have anything more than a vague one sentence definition of it. We found no mention of it in any book in Google Books, and only one article in Material Handling News. However, it is used commonly on 3PL websites. Clearly the broad definition is that it is a location that provides inventory to locations on an emergency or short lead time basis. One company which strongly associates itself with the term is Flash Global Logistics. Flash lists a number of value added services on its website.

Forward Stocking and Service Parts

Forwards stocking is often mentioned in the same articles as service parts logistics. This is natural, as service parts are often required on a short lead time basis. However, there are a number of value added services connected to forward stocking locations that don’t have anything to do with service parts. For instance kitting is connected to service parts operations (i.e. repair kits for automotive, industrial equipment or airplanes), however other value added services such as packaging and configuration apply to both finished goods and service parts.

To find out more about VASs, see this post.

http://sapplanning.wordpress.com/2009/06/14/ewm-vas/

Broadly speaking forward stocking locations, for finished goods, is a subset of the concept of product postponement, which allows a company to defer he final stage of a product to provide maximum flexibility. You can read more about postponement here.

http://sapplanning.wordpress.com/2009/06/19/product-postponement-in-scm/

Forward Stocking and 4PLs

Now the question we are interested in…what about forward stocking and 4PLs? 4PLs are obviously a very good fit with forward stocking, because a 4PL’s theoretical ability to provide visibility into the on-hand balances of many companies that are not necessarily part of the same ownership structure. Currently, there is very little written about this.We are not aware of any 4PL which is providing inventory visibility in this way. If anyone knows of one, please feel free to comment on this post.