The October when we ran out of triple-wall
October 2022. A confluence of auto demand, weather, and one specific supplier issue meant our triple-wall stock hit zero for four days. Here's what we learned about safety stock from the experience.
In the second week of October 2022, our triple-wall reconditioned stock dropped to zero. Not low. Zero. For four business days, every triple-wall order had to be either back-ordered, fulfilled with new boxes, or rerouted to a heavier double-wall as a substitute. It was the only time in our history that any category has been fully out.
How it happened
Three things hit at once. First, two large auto-stamping customers had simultaneous production ramps that consumed about 40% more triple-wall than their normal monthly. Second, the prior month's inbound from one specific supplier — a recycling co-op we lean on for triple-wall — was delayed by a strike at a connecting carrier. Third, a routine inventory audit found about 90 boxes that had been miscategorized and were actually triple-wall double-counted; correcting the count dropped real availability by another 6%.
Any one of those factors we'd have absorbed. All three at once cleared the shelf.
The 96 hours
The first eight or so customers we had to call were unhappy but understanding. The next twelve were less patient. By the end of day two we'd burned through our buffer of grace and were paying expedite premiums to a new-box mill to substitute for triple-wall orders. By day four the supplier's strike was resolved, an inbound truck arrived, and we were back in business.
Total cost of the four days: about $18,000 in expedite premiums plus an estimated $40,000 in customer goodwill (some discounts, some make-good credits, some lost business).
What we changed
- Triple-wall safety stock target moved from "two weeks of typical run rate" to "three weeks of peak run rate." Higher capital tie-up; lower probability of zero.
- Supplier diversification — we now source triple-wall inbound from four co-ops instead of three. The fourth is intentionally redundant.
- Inventory audits monthly instead of quarterly, focusing on the categories with the tightest safety stock.
- Communication protocol for shortages — proactive emails to top-20 buyers within 24 hours instead of waiting for them to call.
The honest lesson
We thought we had enough safety stock. We didn't. The cost of carrying more inventory is real but bounded. The cost of being out is messy, hard to predict, and often larger than the inventory savings would suggest. Since 2022 we've over-bought triple-wall on principle, and the math has worked out fine.
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