Replenishment keeps inventory flowing through the supply chain by maintaining efficient order and line-item fill rates. Essentially, you have the stock you need when you need it.
Without a proper replenishment plan, you increase the risk of under- or over-stocking – both of which can negatively impact your bottom line.
Ensuring accurate and optimal inventory or stock replenishment involves many factors, such as lead times, supplier constraints, safety stock levels, promotions, discounts and seasonality. You’ll also need to use complex algorithms and calculations to get the most accurate demand forecasts, safety stock and replenishment plans considering all these factors.
Regardless of what you’re stocking and selling, you won’t have the stock you need, when and where you need it as cost-efficiently as possible without the right replenishment strategy.
There are different types of replenishment methods that you can adopt to maintain your stock levels and meet demand. Three of the main ones are:
Just-in-time (JIT). This involves only ordering or keeping the stock you need to produce and sell to meet demand. It saves money by reducing holding costs and minimising capital investment. However, if you have an unexpected surge in demand, you could face a stock out or increased costs due to rush orders from your supplier.
Just-in-case (JIC). You would hold extra stock for JIC stock management to meet unexpected demand surges. While this means you’re less likely to miss a sales opportunity, it increases your holding costs and capital investment. It also increases the risk of costly obsolete stock if demand doesn’t increase.
Economic order quantity (EOQ). The EOQ is the ideal quantity at which inventory carrying costs and ordering costs are at their lowest, i.e. the most ‘cost effective’ amount of stock to reorder. However, the EOQ doesn’t consider changes in demand due to product lifecycle stages, seasonal demand, the item’s selling price, or promotional activity. This means you’ll have to recalculate the EOQ for each item regularly.
As you can see, they all have advantages and disadvantages, so rather than use one replenishment method, it’s often better to use the best bits of each type to ensure you have the stock you need.
If you’re managing thousands of SKUs, manually calculating reorder points and quantities is never simple. With global demand and supply in flux, it’s more challenging than ever, and inventory planners spend far too much valuable time working out what, when and how much stock to reorder.
If you’re using an enterprise resource planning (ERP) or warehouse management system (WMS), you’ve probably found that the inventory management functionality is OK, but when it comes to inventory optimisation, they struggle. You’re probably also doing lots of manual calculations and inputting replenishment parameters into the system before any automation can occur.
That doesn’t make sense.
EazyStock is designed to connect to ERPs and WMS to remove manual forecasting and replenishment calculations, eliminating the risk of human error and speeding up the process.
Instead, let EazyStock take your replenishment from an inaccurate struggle to a market-led process that reacts to customer behaviour, production requirements and supplier performance.
Stop manually updating your ERP with replenishment data to inform reorder alerts and let EazyStock whizz through the calculations for you.
EazyStock calculates replenishment parameters, such as reorder points, reorder quantities, and safety stock levels for every stock item you manage. These are then dynamically adjusted based on forecasts, inventory policies and target service levels.
You now have a list of order proposals with optimised order quantities that match demand and account for supply disruption and order constraints.
Once approved, you can import the orders to your ERP for processing. Easy!
Instead of spending your time reviewing every order, EazyStock allows you to focus on reviewing orders that carry the most risk or deviate from the norm.
As EazyStock produces daily replenishment recommendations, you can choose to check every line or let the system automate regular, low-cost orders.
By only reviewing order exceptions, you’ll have more free time to spend on other strategic tasks.
Do you like to order on certain days of the week? Does your warehouse only accept deliveries on weekdays? Do your suppliers have regular shutdowns where no orders can be placed?
These are all fine until there’s a stock issue or someone forgets, and suddenly you’re facing a stock out.
EazyStock’s order calendars let you enter the days when orders can be placed, fulfilled by suppliers or delivered to site. The software then automatically adjusts reorder quantities and safety stock levels to cover upcoming demand, taking another worry off your list.
When suppliers have MOQs or other contractual order constraints such as value, volume weight or container capacity, it’s easy to waste space in shipping containers just to get the items you need. It can also be easy to randomly add other items without considering their demand just so you don’t waste space or money.
Looking ahead to future forecast periods, EazyStock will create a projection of future orders (an order schedule) that considers trends, POs you’ve already scheduled, supplier shutdowns and seasonality, and use it to fill containers or hit minimum order values (MOVs). By filling containers effectively, think of how much money you’ll save by reducing the number of containers you need and preventing excess levels of unwanted stock.
Dealing with orders linked to a bill of materials can be challenging, with different suppliers, lead times, costs and ordering constraints to consider. Let EazyStock’s bill of materials functionality make it easier.
EazyStock allows you to automate BOM forecasting and dynamically update the reordering parameters of BOM-dependent components right down to the smallest nut or bolt.
With accurate demand forecasts, EazyStock automatically adjusts ordering parameters such as safety stock levels, reorder points and order quantities for every item within the BOM. Items are clearly identifiable as finished assemblies, sub-assemblies or components.
You can then feed these forecasts into your ERP to create purchase orders or use EazyStock to plan your ordering, so the right quantities of stock can be ordered at the right time to fulfil production, servicing and sales requirements.