Inventory Management At The Heart Of Replenishment Management

2559 Words11 Pages
1. What is Replenishment? Retail replenishment is part of the supply chain process that ensures an item is replaced as soon as it leaves the shelf after purchase by the end consumer or removal by a stocking assistant at a store due to damage or aging. A. Inventory management: At the heart of Replenishment is inventory management. The Replenishment manager’s task is to ensure they have the right product, in the right amount at the right place. Their job is to walk the thin line between low in stock and over stocking items on a shelf or in the supply chain as a whole. Companies generally do not want to carry too much inventory because of the capital that it ties up. On the other hand, they do not want to lose market share by not having an…show more content…
For example, a retailer will determine that a good presentation of tomato sauce will be twelve bottles. They will work with the manufacture to pack twelve bottles per case so that at the store level, an associate will put all the bottles on the shelf and not have left over that he or she will have to return to the back room. iii) Safety stock: Most order systems are automated, they will trigger an order for a certain item when that item has several units left on the shelf. It is the duty of a Replenishment manager to adjust this number depending on the business need. When setting this number, the Replenishment manager will consider the rate of sale, lead time and will also depend on his or her business knowledge. This may be set higher than the shelf-capacity. For example if the item is on a promotional display and the system needs to order for the shelf capacity and the promotion, then the safety stock will be increased beyond shelf capacity. B. Distribution: A Replenishment manager must learn the different items they manage, and how they flow through the supply chain. The 3 basic flow methods include: • Direct to store – moves from factory to retailer. Usually preferred by regional suppliers. An example would be a Cajun spice manufacturer in Louisiana may prefer to supply retailers in his or her region directly. • Cross dock – moves from manufacturer to consolidation or sorting center, then to retailer. A stores order would be consolidated at a
Open Document