Three Types of Inventory

Systematizing inventory management is difficult when an organization starts with its most complex items. A more effective approach is to begin with the easiest category and expand from there. Approximately 80% of most organizations’ supplies fall into the straightforward category and can be brought under kanban management quickly.

Arda’s inventory classification model divides all supply items into three types based on their consumption frequency and supply predictability.

Type 1: Always In Stock

Type 1 items are the crucial day-to-day supplies that operations depend on: fasteners, paper, gloves, common components. They represent approximately 80% of a typical operation’s inventory.

Characteristics:

• Inexpensive and easy to store
• Sourced from reliable vendors
• Consumed at a predictable rate

Management approach: Managed with kanban cards at fixed shelf locations. A reorder is triggered automatically when a card is scanned at the reorder point. Minimum quantities are set based on vendor lead time plus a safety buffer.

Type 1 items are the primary target of the Arda kanban workflow. The goal of the platform is to make managing these items as close to zero-effort as possible.

Type 2: Infrequently but Reliably Needed

Type 2 items are expensive or bulky items needed occasionally but with some regularity. Examples include specialty tools, specific component variants used in custom builds, or seasonal supplies.

Management approaches:

• Project-based ordering: Create a project in the system, assign items to a bill of materials, and purchase once the project is finalized.
• Order card binder: Keep order cards for Type 2 items in a physical binder rather than on the shelf. Scan the card only when the item is actually needed.

These approaches avoid tying up shelf space and capital in slow-moving inventory while still having a defined reorder mechanism.

Type 3: One-Off Orders

Type 3 items are ordered once and probably never again. They represent a specific customer request or a unique operational need.

Management approach: The system records these in the order archive without requiring a permanent card or shelf location. There is no need to create permanent inventory space or configure a kanban loop for items that will not recur.

Continuous Improvement

The classification of items is not static. As an organization gains experience with its consumption patterns, items can migrate between types. The primary improvement goal is to move items from Type 2 to Type 1 — from occasional managed purchases to automatic kanban replenishment. Each item brought into automatic replenishment reduces the cognitive load on purchasing staff and lowers the risk of stockouts and emergency orders.

Relationship to the Information Model

The three-type classification is a conceptual framework rather than a formal field in the data model. It informs:

• Whether an item has a KanbanCard associated with it (Type 1 items do; Type 3 items typically do not)
• Whether an item has a configured minQuantity (Type 1 items should; Type 3 items will not)
• How ItemSupply entries are created and used in purchase orders

See Items for the formal item entity definition.