A Balloon One blog by Claire Kerr…
Advanced replenishment is a feature of WMS (Warehouse Management Systems) that helps optimise the level of stock that you hold. Wholesale and distribution companies can benefit from how it enhances their operations and streamlines stock management.
Often referred to as automatic replenishment, advanced replenishment is a feature of WMS software. It ensures that a distributor can effectively stock, reorder and replenish the items it carries. In essence, when you are running low on stock, your WMS notifies you and makes specific recommendations about replenishing the goods.
Advanced replenishment means that you are notified well in advance of bins that are running low on stock, allowing you to reorder the necessary stock. If you also carry bulk locations, the advanced replenishment functionality can provide detailed directions about which pick-faces need replenishing and which bulk locations to replenish from.
Advanced replenishment uses accurate and adaptable forecasting algorithms.
Pre-defined minimum and maximum stock levels can be set, and when non-allocated stock drops below the minimum level, the pick face is replenished from bulk, up to the maximum level.
Replenishment is also carried out based on the product velocity. Based on the quantity and frequency that a stock item is picked, it can be categorised into multiple stock velocity levels and the number of days stock on hand required can be defined in the pick face for each level. HIgh velocity stock will have the fewest days, while low velocity stock will have the highest number of days.
By contrast, with standard replenishment, all that happens is that stock gets replenished only once you’ve run out.
Advanced replenishment has a number of business benefits:
It negates out-of-stocked pick-faces, thus reducing potential hold ups when orders are being picked.
Out of stock situations are limited, so avoiding issues and enhancing customer satisfaction.
When you minimise out of stock situations, you maximise sales – There’s no prospect of lost sales due to out of stock situations. And with perishable goods, for example, this eliminates the need to reduce prices for goods that are nearing their sell-by-dates.
It stops you holding excess inventory, which – again with items such as food – can lead to goods being spoiled and unnecessarily accounted as shrinkage.
The entire process is automatic, so you’re routinely advised and are not reliant on manual checks and processes to be sure that you remain informed.
If you’d like to explore the benefits of advanced replenishment, Balloon One’s expertise in both Information Technology and Supply Chain Management can help.