By KYN AI Advisory Team — AI implementation specialists, Singapore
An inventory alert agent compares stock on hand with a reorder point for each item, checks that physical counts agree with the ledger, and sends a short list of exceptions to the warehouse lead. It needs one clean stock ledger to work from. The agent flags. A person reorders. For a small warehouse, three alerts cover most of the value: below reorder point, count mismatch and no movement.
If your stock still lives in spreadsheets, start with moving warehouse stock tracking off Excel. An alert agent is only as good as the ledger underneath it.
What should an inventory alert agent watch?
Five checks. Each one has a rule, an owner and a message.
| Alert | Rule | Who gets it | |---|---|---| | Below reorder point | On hand plus on order is below the item's reorder level | Purchasing | | Stock-out risk | On hand will run out before the supplier lead time, at the recent rate of use | Purchasing | | Count mismatch | Physical count differs from ledger by more than a set quantity | Warehouse lead | | No movement | No issue or receipt for a set number of days | Warehouse lead | | Negative stock | Ledger shows less than zero | Warehouse lead and finance |
Two notes. Include stock on order in the first check, or you will reorder what is already coming. Compute the rate of use from issues over a recent window of your choice, and print the window in the alert.
What data does the agent need?
Four tables, kept by the warehouse system or database.
- Items: code, description, unit, reorder level, supplier lead time, location.
- Ledger: every receipt, issue, transfer and adjustment, with date, quantity, user and reference.
- Open orders: quantity and expected date per item.
- Counts: date, counted quantity, counter.
If receipts and issues are not recorded as they happen, the alerts will lag reality. Fix the capture first. A kiosk or phone form at the point of withdrawal does more for accuracy than any agent. KYN's manufacturer system includes a withdraw kiosk for that reason.
How are the alerts calculated?
In code, not by a model. Stock is arithmetic.
- Compute on hand from the ledger: receipts minus issues plus or minus adjustments.
- Compute available: on hand plus open orders due within lead time.
- Compute days of cover: available divided by average daily issues over your chosen window.
- Alert when days of cover falls below lead time plus a safety margin you set.
A model can help in one place: reading a free-text adjustment note ("damaged in transit") and labelling the reason. Reasons then feed a monthly view of where stock disappears.
Seasonal items break simple averages. Let the user set a manual reorder level that overrides the calculation, and show which one fired.
How should the alert look?
Short and sorted. One message per role, once per day, only when there is something to say.
- A header with the count of each alert type.
- A table of at most 15 rows: item code, description, on hand, available, days of cover, supplier, lead time.
- A link to the item record.
- A line stating when the ledger was last updated.
If nothing triggered, send nothing, or send a single line saying "0 alerts" on a fixed schedule so people know the check ran.
Do not alert on every item that touches its reorder level. Alert fatigue ends the project. Start with the items that stop work or cost most when missing, then widen.
How do you handle count mismatches?
A mismatch means either the count is wrong or the ledger is. The agent cannot tell which, and should not try.
- Flag it with the ledger quantity, the counted quantity and the difference.
- Show the last five movements for the item, so the lead can see where it went wrong.
- Require a person to post an adjustment with a reason. The agent never adjusts stock by itself, because an adjustment changes the books.
Cycle counts, a few items each day, find mismatches earlier than a yearly count. The agent can propose a count list by value and movement.
How do you test it?
- Back-test on three months of ledger history. For each alert the agent would have raised, check whether a shortage followed within the lead time.
- List past stock-outs and check whether the agent would have flagged each one in time.
- Count false alarms by item class.
- Run in shadow for two weeks. The warehouse lead marks each alert useful, late or wrong.
Tune the safety margin from those marks, item class by item class.
What controls does it need?
- Read access to the ledger. No write access.
- A separate restricted account for the agent, logged on every read.
- Alerts go to named people. The agent does not email suppliers or raise purchase orders. See purchasing agent for the next step.
- Row-level security if several sites or tenants share the database.
What does a daily alert look like?
The example below is illustrative.
Purchasing, 07:00, 3 alerts
| Item | On hand | On order | Daily use | Days of cover | Lead time (days) | Alert | |---|---|---|---|---|---|---| | Bolt M12 x 50 | 180 | 0 | 40 | 4.5 | 7 | Below lead time | | Gasket 100 mm | 60 | 200 arriving Friday | 10 | 26 | 14 | None | | Plate 6 mm | 12 | 0 | 2 | 6 | 10 | Below lead time |
The first row is the real exception: 4.5 days of cover against a lead time of 7 days means the item runs out before a new order arrives. The second row would have alerted on a calculation that ignores open orders, which is why on-order stock is part of the rule.
How do you set reorder points?
Start from history, then adjust by judgement.
- Compute average daily use over a window you choose, for example 90 days.
- Multiply by lead time in days.
- Add a safety margin for variation in use or in supplier delivery.
- Round to the order pack size.
Review the reorder points quarterly. Items with erratic demand need larger margins or a manual setting. Items you are phasing out need a lower point so that stock does not build up.
What do you do about slow-moving stock?
The no-movement alert surfaces stock that ties up cash.
- List items with no issue for a period you set, with their value on hand.
- Sort by value, so the largest sums come first.
- Let the warehouse lead mark each as keep, return to supplier, discount or write off.
- Write-offs and adjustments post with a reason and a named approver.
The agent does not decide what to write off. That decision touches the books.
How do multiple locations change the alerts?
If stock sits in more than one location, run the checks per location and in total. An item may be in surplus at one site and short at another, and the right action is a transfer, not a purchase. Show both numbers in the alert, and let the person choose.
Where KYN fits
KYN built stock tracking for a manufacturer: eleven systems consolidated to three on one AWS account, with a ledger, a withdraw kiosk and a 06:30 report to each department on WhatsApp. The same data feeds alerts. Agents use restricted accounts, every action is logged with the actor, and money and outbound messages wait for a named person. The first 14 days are a review of your stack and interviews with your team. A full build ships in under 90 days. See operations and inventory software for Singapore SMEs.
Frequently asked questions
Do we need barcode scanners?
No, but you need a quick way to record each movement. A phone form or kiosk at the shelf works. Scanners reduce typing errors where item codes are long.
Can the agent reorder stock automatically?
It can raise a draft request. A named person approves before anything goes to a supplier, because ordering commits money.
How many items can it watch?
Thousands, since the checks are arithmetic. The limit is how many alerts a person can act on each day. Tune thresholds to that number.
Checked 30 October 2026.
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