Colour and alerts: rules for a good report

Today's stock report: 40 items, 18 of them red. The storekeeper looks and shrugs: which one first? When everything is red nothing stands out, and by tomorrow nobody pays attention to red at all. Colour is not decoration but a limited supply of attention: spend it only when action is needed. This applies to the colours in a report and to the alerts that arrive.

Red only when action is needed

The report's rule: "less than 30 days of stock, red". The result: 18 reds. But lead times differ. An item with 28 days of stock and a 7-day lead time is safe, while one with 12 days of stock and a 14-day lead time will run out before the delivery arrives.

Change the rule. Red: days of stock below the lead time, so the item will run out before the delivery arrives. Amber: days of stock below the lead time plus 7 days, so an order is needed today. The rest has no colour. The result: 4 red, 7 amber, 29 uncoloured (4 + 7 + 29 = 40). Now red is 10 percent, and each one is a concrete task.

Test the rule against the past: take the cases where an item ran out last month and see whether the new rule would have shown them amber or red at least a day earlier. If not, the rule is not yet good enough. While red stays below roughly 10 percent, a person can work through all of them.

Rules for colour

1. Do not colour the norm. If everything good is green, 29 green cells drown out 4 red ones. Let the norm be uncoloured or grey.
2. One colour, one meaning, across all reports. Red should not serve as a category marker anywhere else.
3. No more than three states: normal, attention, problem.
4. Do not bury the threshold in a formula. Write it in a separate cell and explain it at the top of the report. The conditional formatting formula in Excel: $D2 < $E2 (D is days of stock, E the lead time). If the threshold changes, you fix one place.
5. Beside every red cell put a task and an owner: colour solves nothing by itself, it only says where to look.
6. Colour by meaning, not by direction. If shrinkage fell from 2.1 to 1.6 percent, the fall is good: a downward arrow should not be red.

Colour in a chart

On a chart the job of colour is to lead the eye to the right place. Do not paint twelve supplier bars in twelve colours: make them all grey and show the two that need attention in one accent colour. The same category should keep the same colour throughout the report: if supplier A is blue on one page, it is blue on the next. For a scale of numbers (on a heatmap, say) take light and dark shades of one colour.

Do not rely on colour alone

Your team may include someone who cannot tell red from green, and reports are often printed on a black-and-white printer. Add an icon or text to the colour: ▲, ▼, "!" or "Order now". Keep the fill light and the text dark so that reading stays easy.

Alert messages

Whether a message arrives in a Telegram group or by email, the rules are the same:

• Send only when action is needed. Gather the ambers into a digest once a day, say at 09:00.
• Put four things in the message: what, how much, who, what to do. Not "stock is low" but "Cable 3×2.5: 4 days of stock, lead time 7 days. Order: purchasing department".
• Twenty-five messages a day go unread within a week, while 3 get a reply.
• If there is no reply, after 24 hours a reminder goes to the shift leader and after 48 hours to the warehouse manager. That way the signal is not lost.
• Once a month count how many alerts ended in real action. If 9 out of 60, which is 15 percent, the threshold is too sensitive. Move it and cut the alerts.

Conclusion

Colour and alerts work only when they are scarce: red only for a problem, the norm uncoloured, every signal with an owner and a task. A signal rests on a reliable balance: CountLab presents stock-count results as verified figures and picks out the significant deviations in the management report.