Replenishment
Also known as: Stock Replenishment, Inventory Replenishment, Restocking
Definition
Replenishment is the process of restocking inventory to ensure products are available when needed. This includes both internal warehouse replenishment (moving stock to pick locations) and external replenishment (ordering from suppliers).
Types of Replenishment
Internal (Warehouse)
Moving inventory from bulk/reserve storage to forward pick locations:
- Reserve-to-pick transfers
- Pallet-to-case breakdowns
- Case-to-each replenishment
External (Supply Chain)
Ordering new inventory from suppliers:
- Scheduled purchase orders
- Automatic reorder triggers
- Demand-based ordering
Replenishment Strategies
| Strategy | How It Works | Best For |
|---|---|---|
| Min/Max | Order when stock hits minimum, order up to maximum | Simple, stable demand |
| Reorder Point | Order fixed quantity when level triggers | Consistent lead times |
| Periodic Review | Check and order at set intervals | Many SKUs, low volume |
| Demand-driven | Order based on forecasted sales | Variable demand |
Replenishment Formulas
Reorder Point
ROP = (Average Daily Usage × Lead Time) + Safety Stock
Example:
- Daily usage: 50 units
- Lead time: 5 days
- Safety stock: 100 units
- ROP = (50 × 5) + 100 = 350 units
Economic Order Quantity (EOQ)
Balances ordering costs against holding costs to find optimal order size.
Key Metrics
- Fill rate - % of demand met from available stock
- Stockout frequency - How often you run out
- Inventory turns - How fast stock sells through
- Days of supply - How long current stock will last
Replenishment Challenges
- Inaccurate demand forecasts
- Supplier lead time variability
- Storage capacity constraints
- Seasonal demand spikes
- SKU proliferation
Automation
Modern WMS systems automate replenishment:
- Trigger picks when forward stock is low
- Generate purchase orders automatically
- Prioritize based on velocity and urgency
- Optimize replenishment timing and quantities
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