Effective replenishment planning is about having the right product in the right place at the right time to meet customer needs.
Due to increased business complexity and volatility in demand, as well as the need to tightly control inventory levels, replenishment planning can be a deceptively complicated undertaking. Many organisations struggle to understand where to best place inventory (for example, manufacturing plant, store, DC or supplier), as well as when and in what quantities to re-order, in order to respond to customer needs.
When not managed effectively, these factors can manifest themselves as:
Whether a retailer, distributor, manufacturer or importer, effective replenishment planning allows organisations to meet customer service goals while simultaneously achieving inventory investment targets.
By integrating customer demand to purchasing requirements to inventory investment, effective replenishment planning positions the right inventory where and when it is needed in order to best meet customer demand.
Replenishment planning can also provide up to two years forward planning visibility, enabling for the effective management of key risks and events such as facility capacity, shut-downs, and seasonal activities.
GRA’s view is that replenishment planning should be proactive, dynamic and predictive. These are desirable characteristics because:
We also advocate an exception based view of replenishment activity – distinguishing between balanced items requiring no action, items requiring regular reordering activity and items requiring actions to resolve over or under stocks – to enable focused, value-add planning activity.
As such, GRA’s approach involves working with our clients to develop the capabilities required for optimal replenishment planning.
This may include:
The following are outcomes of this approach:
View GRA's infographic on Replenishment Methodologies.
"Sales and profits are up, and Damaged & Dated is down. The sales team is engaged and enthusiastic about the S&OP process. It's a nut we've been trying to crack for two years, and we're finally seeing some green shoots."
– Paul Foster, Sales Director - Convenience & Food Service, Lion Dairy & Drinks