Replenishment

The two kinds of replenishment

Purchasing replenishment answers the question "do we have enough in the building?" It creates purchase orders to suppliers, or transfers from another warehouse, when projected stock falls below a threshold.

Internal replenishment answers "is stock where pickers can reach it?" It moves a case or pallet from reserve to a pick face. A warehouse can have plenty of stock and still miss orders because the pick face is empty.

How replenishment is triggered

The most common trigger is a threshold. For purchasing, that is the reorder point: average daily demand multiplied by supplier lead time, plus safety stock. For example, linen towels selling 20 a day with a 10-day lead time and 60 units of safety stock reorder at 260 units.

• Min/max: when stock falls to the minimum, order or move enough to reach the maximum.
• Days of cover: keep enough stock to cover a set number of days of forecast demand.
• Fixed schedule: review every SKU weekly and order what is short.
• Demand-driven: top up a pick face before a large batch of orders is released.

Common replenishment mistakes

Using the same trigger for every SKU is the most common problem. A fast mover with a long lead time needs a very different threshold from a slow mover you can buy locally in two days.

Other mistakes are counting stock that isn't usable, such as quarantined or expired lots, and ignoring open purchase orders, which leads to double ordering. The reorder point calculator helps you set sensible thresholds per SKU.

How NextStock handles replenishment

NextStock produces replenishment suggestions based on demand and cover, and proposes either purchase orders or transfers from another warehouse. Suppliers carry pack sizes, lead times and minimum order quantities, so a suggestion can be rounded to what you can actually buy. Pick faces carry min and max levels for internal top-ups. See purchasing and replenishment.