Part 2 of 3 in our inventory management series.

Inventory Visibility and Reporting for Distributors

Once you have a solid foundation—one source of truth, accurate counts, and a clear link to orders and shipping—the next step is visibility: knowing what you have, where it is, and when to reorder. This post covers stock levels, reorder points, reporting, and how EDI 846 and system sync give you and your retail partners the visibility they need.

Why Visibility Matters

Without good visibility, you’re making decisions in the dark. You might reorder too early (tying up cash in excess stock) or too late (stockouts and missed orders). Your retail partners face the same problem: if they don’t know your availability, they can’t plan replenishment or promotions effectively. Visibility is what turns raw inventory data into actionable information.

Stock Levels and Locations

What to Track

At a minimum, track:

• On-hand quantity by product and location (e.g., warehouse, zone).
• Reserved / allocated quantity (tied to open orders).
• Available to sell (on hand minus reserved), which is what you can promise on new orders.
• In transit (on order from suppliers or in shipment to customers) when relevant.

Many distributors also track safety stock and reorder points so the system can flag when to reorder.

Single vs. Multiple Locations

If you have one warehouse, a single set of numbers may be enough. With multiple locations or channels, you need visibility by location so you can:

• Allocate the right inventory to the right orders.
• Report location-level data to retailers who require it (e.g., in EDI 846).
• Rebalance stock between locations when needed.

Reorder Points and Alerts

A reorder point is a threshold: when on-hand (or available) falls to or below it, it’s time to reorder. Setting reorder points helps you:

• Avoid stockouts by ordering before you run out.
• Reduce the need for constant manual checking.
• Smooth demand by ordering in a more disciplined way.

Combine reorder points with alerts (email, dashboard, or report) so the right person is notified and can place a purchase order or production order in time.

Setting Reorder Points

Reorder points are often based on:

• Lead time: How long it takes to receive new stock.
• Average demand: How much you sell per day or week.
• Safety stock: Buffer for variability in demand or supply.

A simple approach: Reorder point = (average daily usage × lead time in days) + safety stock. You can refine this over time with historical data and seasonality.

Reporting That Drives Decisions

Use reports to spot trends and problems:

• Aging inventory: What’s been sitting too long and may need promotion or write-down.
• Stockouts and near-stockouts: Which SKUs hit zero or fell below reorder point.
• Fill rate: Percentage of order lines or units fulfilled from stock; a key metric for retailer performance.
• Inventory turnover: How quickly you sell through stock; helps with purchasing and cash flow.

Dashboards that show current levels, trends, and exceptions (e.g., below reorder point) keep managers informed without digging through spreadsheets.

EDI 846 and Sharing Visibility with Retailers

Many retailers want inventory advice (or responses to inventory inquiry) in a standard format. That’s EDI 846. When you send 846:

• You’re giving the retailer a snapshot of your availability (by their required product IDs and, if required, by location).
• They use that data to plan replenishment and generate 850s at the right time.
• You reduce the risk of them ordering when you’re out of stock or cutting you off for non-compliance.

To do this well, your “source of truth” for inventory must feed your EDI 846 generation—same numbers you use internally and for order acceptance. Automating 846 from your WMS/ERP keeps the data consistent and reduces manual work. For more on 846, see What is EDI 846?.

System Sync and Single Source of Truth

Visibility only works if systems are in sync. If your ERP says one thing and your EDI or e-commerce platform says another, you’ll have conflicting numbers and confused partners. Best practice:

• One system (or one logical “source of truth”) holds inventory.
• Other systems (order management, EDI outbound, storefronts) get inventory via integration, not separate data entry.
• Updates (receiving, shipping, adjustments) are made in the source system and propagated automatically where needed.

That way, the numbers you see in reports, the numbers you use to accept orders, and the numbers you send in 846 all match.

In Part 3: Inventory and Order Fulfillment, we cover avoiding oversell, allocating inventory to orders, and using ASNs (856) and inventory data to keep retailers informed from order to delivery.

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Series: How to Manage Inventory

• Part 1: Inventory Management Basics
• Part 2: Inventory Visibility and Reporting (this post)
• Part 3: Inventory and Order Fulfillment