Replenishment planning helps keep inventory flowing steadily through your supply chain. Ideally, in an effective business model, you have a steady stream of inventory moving through your business.
Customers purchase the items you have put on the shelves, and you have the inventory needed to replace them in a timely manner. When you don’t keep up with effective replenishment planning, you may find yourself with backordered items, dissatisfied customers, and bigger problems with supply chain snarls and other problems along the way.
Keeping up with effective replenishment planning can help you keep that steady flow of inventory and increase the odds that you will keep your customers satisfied. Replenishment planning includes a number of key components that you need to take into consideration.
1. End to End Supply Chain Visibility
When it comes to your supply chain, it’s important to have visibility from one end of it to the other. You need to know what’s going on with your supply chain at any given time, from acquiring raw materials to create those products through production, and through the process the goods take to make it to your store.
The last few years have given us a lot of insights into how the supply chain can impact consumers’ ability to get their hands on the products they need (and businesses’ ability to deliver those products).
A problem at the beginning of the supply chain can quickly trickle down to impact the entire market.
The sooner you catch a supply chain problem, the faster you can find another source for essential products or come up with a different transportation solution. Without visibility, on the other hand, you may not be sure when products are arriving, where they are, or what problems might prevent them from getting to you.
2. Forecasting and Demand Planning
Knowing what consumers are likely to purchase can prove invaluable as you attempt to manage the replenishment planning process.
If you’re waiting until customer demand increases to start ordering more of a particular product, you may find it very difficult to keep up with customer demand–and all too quickly, you may find yourself without the items your customers are looking for, which means you may end up missing out on vital sales.
Forecasting and demand planning can help you get a better idea of what your customers will actually need. It includes:
- A close look at product life cycles
- Managing seasonal demands
- Keeping up with potential promotions and how they have the potential to impact your inventory
Your supply chain planning solution can provide a number of essential insights into demand forecasting, including a look at how those products have performed historically, times when they are likely to increase in demand, and how economic changes have the potential to impact those life cycles.
3. Space Planning
In order to make the most of your replenishment planning, it’s important to also incorporate space planning, particularly in your warehouses.
You want to make sure that you have a solid understanding of where everything is in your warehouse and how to access it. In addition, you may want to make sure that you have planned out the use of that space to make the best possible solutions for your inventory.
For example, leading up to a big sale, you may want to make sure that you have more of a specific high-demand item in stock. As you move toward the holidays, you may need to make room on your shelves for holiday-themed items, including gifts, decorations, and toys, depending on your specific inventory needs.
All too often, warehouses end up overcrowded with inventory that simply isn’t necessary. That may mean that you do not have space for the items that customers do want–and can mean missed sales.
4. Stocking and Rotation Plans
When the time comes to head into the warehouse and move inventory to the shelves, do you have a system in place?
What about picking orders: do order pickers know that they need to select the items that have been in the warehouse the longest when possible to ensure that you do not have damage or waste? If you do not have a clear stocking and rotation plan in place, you may end up with damaged inventory that you cannot sell, or that you have to sell at a discount.
In other cases, you may end up with important inventory shoved to the back of the warehouse, where it can end up forgotten until you have the chance to do a full inventory or audit of the entire warehouse. A clear stocking and rotation plan can help ensure that inventory gets moved and transitioned effectively, avoiding waste and damage.
5. Solid Understanding of Lead Times
Lead times are the time between placing an order and receiving that order. Not only do you need to know likely lead times on key products, but you may also need a solid understanding of how long it might take to ramp up production in order to bring in more of a high-demand item–and how those demands may vary by vendor.
If you do not know your lead times, you may end up ordering too late. Those late orders can prove catastrophic, particularly around holidays or special events, when a lack of inventory will quickly push customers to go somewhere else for their needs.
6. Current Insights
As part of your replenishment planning, you must take current insights into your sales under consideration.
Often, sales can go differently than anticipated, and you need to be able to adapt quickly and effectively to those changes and challenges. If you aren’t incorporating current trends into your replenishment planning, you can end up overstocked or understocked on key inventory.
Get Replenishment Planning Help
Your replenishment planning is a critical, ongoing process for your business. By keeping an eye on these key components of that replenishment planning process, from your overall supply chain to your lead times, current sales, and more, you can better prepare to keep up with those needs.
Contact us today to learn more about how our supply chain and inventory planning solutions can help you maintain better replenishment cycles for your brand.
