A key consideration for stock replenishment is safety stock. In any case, safety stock keeps you covered in the event of unforeseen circumstances. Deciding how much safety stock to carry depends on a number of factors, such as lead times , demand, and carrying costs. Ultimately, you want to have enough safety stock to meet demand and support your usual stock replenishment cycle, but not so much that increased holding costs end up straining your finances.
Most inventory management systems follow replenishment rules to automate operations. The reorder point is the point at which stock needs to be reordered — taking into account current and future demand, along with how long it will take your supplier to send you the new order.
To make life easier, you can also use a reorder point calculator. Using an inventory management system like QuickBooks Commerce, you can set a reorder point for different product variants to trigger stock replenishment automatically any time the reorder point is reached for a particular variant.
Knowing your reorder point and optimal safety stock level go hand in hand with maintaining good stock replenishment principles.
However, most importantly, you should have a robust inventory management system in place that can automate the stock replenishment cycle — enabling you to not only maintain ideal stock levels but also quickly and easily shift with changing demand. Contact us here and one of our experts will be in touch.
Share this post. We think you might like these posts too. What is Stock Replenishment? Stock Replenishment Definition Stock replenishment is a standard retail practice, to ensure that the right products are in the best place, at the optimum quantity.
Better stock replenishment maintains optimum inventory levels on all products so that you can sell more effectively where and when it is needed. Reduced mark-downs : Optimised stock levels allow you to fulfil your customer demand with fewer stock outs. With a greater sell through of full priced stock and a reduced rate of markdown, margins are protected and profits soar. Maximise stock turn : Confidently fulfil customer demands without inflating your levels of inventory, preventing over and under stocking, both of which damage business profitability.
In addition, use POS data for more accurate lead time forecasting, which is the time it takes for a new order of your product to actually reach the shelves. Why are these metrics so crucial to stock replenishment? Accurate demand and lead time forecasts lessen the chance of a stockout or backorder, while also reducing the likelihood that your retailers will receive more of your product than they can stock. Like we mentioned before, use it to get the most accurate demand forecasts and lead time forecasts about when to reorder new stock of your product.
POS data gives you three insights that you can use to further develop your stock replenishment process:. The reorder point is a given level of stock that indicates that a new order is needed. You have to factor in how quickly the remaining stock will deplete demand forecast before the next shipment arrives lead time forecast. It all goes back to having accurate data from the store-level. We now know that you have to replenish your product when it reaches the reorder point, but how do you know exactly when that will happen?
There are two strategies for reviewing the stock level at your accounts:. Find the strategy that makes the most sense for your brand. Use your data to determine how frequently your periodic reviews should occur , or if your brand requires a continuous review. For brands that use a distributor, make sure you inform them of your demand and lead time forecasts.
It might help to show distributors the data behind your calculations so they can better understand the importance of executing your plan on time. Keeping your stores stocked is a delicate operation, and any delays could throw your entire retail execution plan off and lead to a loss in sales. When your reps make their next visits to their accounts, have them record the following data points :.
Use a mobile form to easily fill out and record this information for evaluation later. As you might have guessed, this is where the process starts over.
0コメント