Get Your Stone Slabs in Order: A Simple Guide to Saving Money
How often do you face the same old headaches with inventory checking and management? Do you ever have slabs that just disappear, only to pop up months later? Do your jobs get stuck because you don’t really know what stone you have in stock? Is your money just sitting there, tied up in stone that isn’t moving?
If you’re nodding your head, saying “too often,” then you’re not alone.
💡A messy pile of stone inventory doesn’t just give you a headache; it’s actually costing you real money.
But don’t worry. This guide is made for shop owners and stone sellers just like you. We’re going to share simple, smart ways to take charge of your stone piles, cut down on costs, get rid of the stress, and finally, make more money. Let’s turn that mess into a well-oiled machine!
1. Start from the basics: the hidden cost of a messy Inventory
Inventory management is simply about keeping track of your stone slabs: ordering them, storing them, using them, and selling them. The main goal is to have the right stone, in the right amount, in the right place, at the right time, for the right price. Seems easy, right? But in real life, a messy inventory can cause big problems:
- Losing Money: Buying too much stone means your cash is stuck, not working for you. You might also have material that gets damaged or goes out of style, losing value. And then there’s the dreaded “ghost stock” – stone you think you have but don’t, leading to lost sales or wasted re-orders.
- Wasting Time: Your workers spend precious time looking for slabs. Production gets stuck because you’re out of a certain stone. And your valuable team isn’t used in the best way.
- Unhappy Customers: You can’t finish jobs on time because of material delays, you give wrong prices, and customers get mad and go to your competitors.
- Bad Decisions: Without knowing exactly what you have, your choices about buying and selling are just guesses, not smart plans that help your business grow.
Other examples and the solution will be presented later in this post, along with the useful information to better manage your inventory and keep it updated.
Using paper lists or basic computer files (like spreadsheets) leads to many mistakes and becomes impossible to manage as your business grows.
A good example would be your salesman selling an item and forgetting to update the spreadsheet or the inventory board. Then another salesman sells the same item again, and when he checks for the availability to deliver, the item is not there anymore cause it had already been sold.
The answer is to use proven ways to manage your stone, backed up by the right computer tools.
1.1 Accounting for Inventory
Think of your inventory – that’s all the stone slabs, tools, and other materials your business has – as money you can easily use. In accounting, we call it a “current asset” because you plan to sell these finished products pretty soon, usually within a year.
Before you can show how much inventory your business owns on its financial report (called a “balance sheet”), you need to actually count or measure every single item. Nowadays, many companies use smart computer systems to keep track of their inventory in real time, so they always know what they have.
When it comes to counting the value of your inventory, there are a few common ways businesses do it:
- First-In, First-Out (FIFO) costing: This method assumes that the first stone slabs you bought are the first ones you sell. So, the cost of your oldest slabs is used when figuring out how much money you made.
- Last-In, First-Out (LIFO) costing: This is the opposite. It assumes the last stone slabs you bought are the first ones you sell. So, the cost of your newest slabs is used to figure out your profit.
- Weighted-Average costing: This method takes the total cost of all the slabs you have and divides it by the total number of slabs. It gives you an average cost for each slab, no matter when you bought it.
No matter which method you use, an inventory account usually considers these four categories:
- Raw Materials: These are the basic materials your company buys to start making something. For you, this would be the raw, uncut stone blocks or slabs right as they arrive from the quarry or supplier. They need a lot of work before they become a finished product.
- Work in Process (or Goods-in-Process): This is when your raw materials are currently being worked on. Imagine a stone slab that has been cut into pieces for a kitchen countertop but isn’t polished or installed yet. It’s halfway to being a finished product.
- Finished Goods: These are your completed products, ready to be sold to customers. This would be a fully fabricated countertop, polished and ready for delivery and installation.
- Merchandise: This refers to finished products that your company buys from another supplier just to resell them later, without changing them much. For example, if you buy pre-made stone sinks from a different company to sell alongside your countertops, those sinks would be merchandise.
1.1 Methods to better manage your Inventory
Beyond the basic rules, there are other smart ways to manage your stone business, especially as you grow or deal with different types of material. :
Just-in-Time (JIT)
Very challenging for huge, bulky items like stone slabs, but you can still use some of the ideas from Just-in-Time.
For example:
💡 Instead of keeping a huge pile of rare or very slow-selling exotic slabs, you could order them “just in time” for a specific project that’s already booked.
This helps you save on storage costs and reduces the risk of having old, unsold stone taking up space.
Most countertop fabricators who say “they don’t have inventory” actually use a Just-in-Time model: they have only the slabs that are in production. This way, when a new project comes, they’ll buy exactly the slabs and materials they need to fulfill that project.
Material Requirements Planning (MRP)
If you do a lot of projects and use a good computer management system such as SlabWare , a Materials Requirements Planning (MRP) system can be a game-changer.
It looks at all your upcoming job orders, figures out exactly what types and amounts of slabs you’ll need for each countertop, and then compares that with what you currently have in stock. This allows it to automatically plan when and how much material you need to order.
An MRP helps you get the exact stone you need, right when you need it, making your buying super smart and efficient.
Economic Order Quantity (EOQ)
This model works by calculating the number of units a company should add to its inventory with each batch order to reduce the total costs of its inventory while assuming constant consumer demand.
It seeks to ensure that the right amount of inventory is ordered per batch so a company does not have to make orders too frequently, and there is not an excess of inventory sitting on hand.
💡 The EOQ model aims to minimize total inventory costs by minimizing setup/order costs and holding costs.
This model works well, particularly for Distributors who have their best-sellers well defined (read below about the best sellers and how to never run out of them) and want to order the exact amounts they can sell in each period of time.
Days Sales of Inventory (DSI)
DSI indicates the average time in days that a company takes to turn its inventory, including goods that are a work in progress, into sales. That means how many days a company’s store will last.
DSI is also known as the average age of inventory, days inventory outstanding (DIO), days in inventory (DII), days sales in inventory, or days inventory and is interpreted in multiple ways.
Generally, a lower DSI is preferred as it indicates a shorter duration to clear off the inventory, though the average DSI varies from one shop to another.
2. Inventory checks: know exactly what you have
To start taking control of your inventory, the very first thing you need to do is know exactly what stone you have.
This means more than just counting everything once a year and shutting down your whole business to do it. The key is to always be updated on what’s in your yard, by doing regular checks.
2.1 Why knowing exactly what you have helps
Having accurate and real-time information about your inventory brings huge benefits:
- See Everything Clearly: You always know which slabs you have, where they are sitting in your yard, and if they’re already promised for a job or ready to sell. This gives you a complete picture.
- Stop Losing Stone: It cuts down on “ghost stock” (slabs you thought you had but don’t) and truly lost slabs, stopping you from buying stone you already have and wasting money.
- Make Better Choices: With good, solid information, you can get better deals from suppliers because you know exactly what you need. You can also promise real, honest deadlines to customers because you know your stock is ready.
- Smoother Work: Your cutting and sales teams always have the right info. They don’t waste time searching, which makes the whole process faster and less stressful. This also helps you use your skilled workers’ time in the best way.
- Better Money Flow: You don’t have too much money tied up in stone you don’t need, which means you have more cash for other parts of your business.
2.2 Ways to count your slabs and keep them updated
Think of it like this: every single slab that comes into your yard, gets moved, or leaves for a job should be instantly updated in your computer system. This helps you keep a real-time picture of your stone.
- Perpetual Inventory: This is the ideal way. It means you record every single movement of stone as it happens.
Every slab that enters, moves from one spot to another, or leaves your yard is immediately updated in your system. This gives you an instant picture of your stock at any moment, like a live camera always showing what you have.
- Cycle Counting: Instead of counting everything at once (which can shut down your shop for a day or two), you count small parts of your inventory regularly.
Maybe you count one type of granite every Monday, and another type every Tuesday. This helps you find and fix any differences quickly, keeping your overall inventory accurate without stopping your whole operation.
- Using Modern Tools for Counting:
- Scanning Barcodes or QR Codes: This is the fastest and most accurate way. You give each slab a unique tag with a code. When a slab moves, you just scan the code with a special scanner or even your phone. This instantly updates your system.
SlabWare’s Labels can help you conduct inventory checks quickly and without any trouble. Simply scan the QR Code Label with your smartphone or tablet, and the system verifies that slab automatically.
- Manual Updates: For smaller movements or when a scanner isn’t handy, you can type in updates. The key is to do it right away.
- Import/Export with Files (CSV/Excel): If you’re doing a big count, you might export your current stock list to a spreadsheet, update it after counting, and then import it back into your system. This helps with larger, planned counts.
SlabWare also allows you to import Excel files with your bundles directly into the system. If that is the way it works for you, we got you covered!
These methods, especially with modern tools, help you move away from old paper lists.
💡Old paper lists are always full of mistakes and become impossible to manage as your business grows.
3. Not all slabs are equal: focus on your Best Sellers (The 80/20 Rule)
Once you know exactly what stone you have, you’ll start to see something interesting: not all your slabs are equally important. It’s like the “80/20 rule” in business:
💡About 80% of your sales come from only 20% of the different types of stone you keep in your yard.
3.1 What is the ABC Method?
This rule is super important! It means you shouldn’t manage every piece of stone with the same amount of effort. Instead, you should focus your time and attention on those top 20% of slabs that bring in most of your money. We call this the ABC Method, and it helps you put your stone into groups and focus your effort where it matters most:
- Category A (Your Superstars): These are your most valuable and fastest-selling slabs. Think about those popular white quartz colors, classic granites, or rare exotic marbles that everyone wants. They might be a small number of your total slabs, but they’re responsible for most of your cash flow and profit. These need the tightest control, frequent counting, and constant attention. You simply cannot afford to run out of these!
- Category B (Your Steady Sellers): These are slabs that sell at a good pace and have a medium value. Maybe standard granites, some mid-range quartz colors, or common marble types. They represent a middle ground in terms of both how many you have and how much they’re worth. They need regular checks, but not as often as your “Superstars.”
- Category C (Your Occasional Sellers): These are the largest number of your slabs, but they bring in the least money. This might include small leftover pieces (your remnants), cheaper stone types, or those that don’t sell very often. They have the lowest monetary value. These don’t need as much constant watching and you can be more relaxed with their counting.
3.2 Why the ABC Method Helps
By knowing which slabs are your “Superstars,” you can make sure you’re using your time and effort wisely, focusing on what truly makes you money.
- Use Time and Money Wisely: You dedicate your best efforts and closest checks to the slabs that bring in the most money and sell the fastest.
- Lower Control Costs: You don’t waste as much time or resources managing low-value items that don’t move quickly.
- More Profit: By cutting down on lost sales from popular items and avoiding too much stock of slow-moving items, you make more money from your investment.
- Smart Yard Layout: You can organize your yard so your “A” slabs are the easiest to get to and load, speeding up your whole operation.
It’s a smart way to work, not harder, but much, much smarter.
4. Safety Stock: The secret to never running out of your best sellers
Now that you know your “Superstars” (Category A slabs), you need a plan to make sure you never run out of them. Even with careful tracking, real life is unpredictable. What if your supplier is late? Or suddenly, everyone in Orlando wants that specific blue granite, and your sales jump higher than expected? This is where “safety stock” comes in.
4.1 What is Safety Stock?
Safety stock is like a backup pile of stone. It’s an extra cushion of inventory that you keep on hand specifically to protect you from unexpected problems. Its main goal is to prevent you from running out of material (a “stockout”). If you run out, you risk losing sales, delaying projects, or making your customers angry.
The big challenge with safety stock is finding the right amount:
- Too much safety stock means your money is just sitting there, not working for you, and it takes up valuable space in your yard (these are called “holding costs”).
- Too little safety stock means you could run out, lose sales, and hurt your shop’s good name (these are “shortage costs”). The trick is to find that perfect balance.
4.2 Key Things to Think About for Safety Stock
When figuring out how much safety stock you need, consider these important points:
- Delivery Time (Lead Time): How long does it take from the moment you place an order with your supplier until the new stone actually arrives at your yard? The longer or more unpredictable this time is, the more safety stock you might need.
- How Much Demand Changes (Demand Variability): Is the demand for this stone steady, or does it go up and down a lot? If demand is very unpredictable, you’ll need more safety stock.
- Supplier Reliability: How good are your suppliers at delivering on time, every time? If they’re often late, you’ll need a bigger cushion.
- How Happy You Want Your Customers to Be (Service Level): This is about how often you are willing to risk running out of a certain slab. For example, if you aim for a 95% service level, it means you’re only willing to accept a 5% chance of running out of that particular slab. The higher your desired service level, the more safety stock you’ll need.
Safety stock is super important, mainly for your Category A slabs, because running out of these has the biggest negative impact on your money coming in
4.3 Method for Calculating Your Safety Stock
To calculate your safety stock, we’re gonna focus on the method called Deterministic, which is very suitable for most businesses:
💡Safety Stock = (maximum daily sales – average daily sales) x Lead Time (days)
Example:
Let’s imagine you own a busy stone shop in Houston, and you’re trying to figure out the safety stock for your most popular slab: “Calacatta Gold”.
Here are the numbers for “Calacatta Gold” at your shop:
- Maximum Daily Sales: On your busiest days, you might sell or use up to 5 slabs of Calacatta Gold. This is your highest demand.
- Average Daily Sales: On a normal day, you usually sell or use about 3 slabs of Calacatta Gold. This is what you expect on average.
- Lead Time (as a buffer quantity): Now, “Lead Time” usually refers to days. This is how many days it takes from the moment you put the order until the moment the materials in that order arrive at you. In this case, let’s assume that if you put an order now, your supplier delivers in up to 7 days.
Now, let’s put these numbers into your formula:
Safety Stock = (Maximum Daily Sales – Average Daily Sales) x Lead Time (days)
Safety Stock = (5 slabs – 3 slabs) x 7 slabs
Safety Stock = 2 slabs x 7 slabs Safety Stock = 14 slabs
So, based on this calculation, your safety stock for “Calacatta Gold” should be 14 slabs.
6.3 Other types of stone stock to know about
It’s not just “stock on hand.” Different types of stock exist, and knowing them helps you manage better:
- Cyclical Stock: This is the normal stock you order regularly to meet demand. It goes up when you get a delivery and goes down as you use the stone.
- Dormant Stock (or Dead Stock): These are slabs that haven’t moved or sold in a very long time. They’re just sitting there, tying up your money and space.
Knowing what’s dormant helps you plan sales or promotions to get rid of it.
- In-Transit Stock: This is the stone that you’ve ordered and paid for, but it’s still on its way to your yard. It’s technically yours, but you can’t use it yet.
- Speculative Stock: This is stone you buy because you think its price might go up, or you expect a sudden jump in demand.
Speculative stock is a bit of a gamble, but it can pay off if your guess is right.
- Consignment Stock: This is stone that’s in your yard, but you don’t own it yet. It still belongs to your supplier, and you only pay for it once you sell or use it.
This is great for trying out new materials without tying up your cash.
Knowing these different types helps you manage your money and space even better.
5. When to order more stone: calculating your Reorder Point
Knowing your safety stock is one thing, but knowing exactly when to order more slabs is another level of smart business. This is where your “Reorder Point” becomes your best friend.
5.1 What is a Reorder Point?
The Reorder Point (sometimes called the “Order Point” or “Reorder Threshold”) is that magic number.
Reorder Point is the level of stone inventory where you should place a new order to get more slabs.
The goal is to make sure you have enough stone in stock until the new delivery arrives, so you don’t run out before the new shipment gets there. It plays a huge role in keeping your inventory just right, avoiding both running out and having too much stone sitting around.
5.2 How to calculate your Reorder Point
You figure out your Reorder Point with this key math:
Reorder Point = (How many slabs you use on average each day × How many days it takes for new stone to arrive) + Your Safety Stock
Let’s break down each part:
- How many slabs you use on average each day: This is the average amount of a specific slab you use or sell each day. You can figure this out by looking at your past sales or usage records over a period and dividing it by the number of days you were open.
- How many days it takes for new stone to arrive (Delivery Time / Lead Time): This is the number of days your supplier takes to deliver the order once you’ve placed it.
- Your Safety Stock: This is the extra amount of stone you’ve set aside to protect against unexpected problems, like supplier delays or sudden jumps in demand.
Example:
Imagine a shop in Dallas uses about 3 slabs of “Roman Travertine” every day.
Their supplier takes 15 days to deliver a new order. And because this stone sells like hotcakes, they’ve determined they need a safety stock of 20 slabs to be safe.
So, their Reorder Point would be: (3 slabs sold per day × 5 days) + 20 slabs = 15 + 10 = 35 slabs.
This means, when their count of “Travertine” hits 35 slabs, it’s time to place that new order.
If your computer system alerts you at this point, like SlabWare does, you’ll have enough stone (35 slabs for those 5 days of normal use, plus the 20-slab cushion) until the new shipment arrives.
This keeps your work flowing, your team motivated, and your customers happy.
5.3 Why a Bad Calculation Hurts
Calculating your reorder point wrongly can cause big problems:
- Running Out of Stock (Shortage): If you set your reorder point too low, or don’t track your demand and delivery times well, you’ll end up with empty shelves. This means lost sales, angry customers, and a scramble to get material.
- Too Much Stock (Overstocking): If you set your reorder point too high, you’ll end up with piles of stone sitting around that you don’t need right now. This ties up your cash, takes up valuable space, and increases your storage costs.
- Poor Cash Flow: Having too much stock means your money is sitting still instead of being used for other important parts of your business, like new equipment or paying bills.
- Bad Planning: Incorrect reorder points mess up your whole production schedule and your relationships with suppliers.
To make sure your reorder point is always working for you, you need reliable information about how much stone you use and how long deliveries take. The more accurate your data, the better your reorder point will be.
And how SlabWare can help you with your Inventory?
SlabWare is the software you need to easily manage the stones in your inventory. You can register the bundles you buy using the purchase documents (PL or Proforma), or if you prefer, simply take the Excel file with the materials your supplier sold you and import it into the system.
Besides that, if your supplier also uses SlabWare, you can ask him to generate a key from the order, which you can use to automatically import all the materials in that order directly to your system.
Start a Free trial or schedule a demo right now!
With SlabWare, you can apply all the topics you’ve read in this blog, and we hope they’ll be useful to better manage your inventory.