![]() This can be done by centralizing inventory planning activity, so forecasting and replenishment activities are both done with a holistic view of the supply chain. The secret to achieving great stock replenishment is optimizing inventory levels at each stage of the supply chain. Retailers – helps prevent dreaded ‘out-of-stock’ scenarios and keeps customer reviews positive which is terrific for any brand. Wholesalers – allows them to fulfill customer orders on time, keeping them loyal and coming back for more. Manufacturers – ensures a continuous supply of raw materials and prevents costly delays in production. Great stock replenishment can add value along the entire supply chain: Stock replenishment methods along the supply chain That is, they’ll be able to invest the right amount of working capital in stock to fill orders and optimize sales without risking a build-up of excess or even obsolete stock due to over-ordering. With stellar stock replenishment methods, businesses are in a much stronger financial position. set higher service level targets for items that are cheaper to sell and have consistently high demand, compared to those that are expensive and have low, intermittent demand. They can then set service level targets (or order fulfillment targets) based on these factors e.g. Prioritizing which stock items to carry based on their forecasts, an item’s demand volatility and pick frequency and cost of sales.Accurately forecasting future stock requirements – using statistical demand forecasting techniques. ![]() missed sales targets or costly backorders.Ī smart replenishment planning team will be able to balance this inventory investment risk by: warehouse costs, opportunity costs and cashflow problems, with the risk of not having enough e.g. Instead they balance the costs of holding stock e.g. In reality most businesses don’t have the working capital to stock every SKU to the levels required for 100% availability. Stock replenishment can have a significant effect on a business’s inventory risk and consequential financial situation. What’s the financial impact of effective stock replenishment? Ultimately high levels of stock availability, due to effective replenishment processes, deliver high service levels that in turn ensure customer satisfaction. Why are effective stock replenishment methods important?Įffective stock replenishment methods ensure the efficient flow of inventory items as they move through a supply chain. This means that in the background, an inventory management team needs to be monitoring stock levels and focusing on ordering the right inventory items, at the right time to ensure stock availability, ready for replenishment. How does the stock replenishment process work?Īs goods leave a warehouse, or are used in a manufacturing process, stock replenishment teams will ensure they have the back-up to refill the shelves with inventory items, ready for the next round of picking. Here’s quick overview of what stock replenishment is and how great stock replenishment methods can truly add value to any business. Yet inventory replenishment planning – done correctly – can have a really positive impact on your business in terms of improving operational efficiency, reducing supply chain risk and enhancing bottom line profitability. Effective stock replenishmentĪny supply chain management professional will tell you that it’s an arduous balancing act to maintain optimized inventory levels through effective stock replenishment. Stock (or inventory) replenishment is the process of moving items along the supply chain so they are ready to be picked and shipped, thus fulfilling orders on time. Stock replenishment is an important aspect of inventory management, as it ensures the right stock items are being reordered to meet customer demand.
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