A hesitance to change to unknown tools from known tools, despite the limitations of the latter.A preference for developing a platform in-house, despite the human and fiscal cost of development system maintenance.A fear of the cost of a brand-new platform.Businesses may initially balk at the idea of adopting a new platform for several reasons: The chief obstacle to embracing automated replenishment comes from the need to either adopt or upgrade to a robust replenishment platform capable of handling the task. 5 key benefits of automated replenishment optimization Manual ordering in these situations is inevitably labor-intensive, costly, and simply impractical for the vast quantities of data that need to be analyzed effectively, resulting in errors and increased costs. Manual ordering is inevitably labor-intensive, costly, and simply impractical for the vast quantities of data to be analyzed effectively, resulting in errors and increased costs.Ĭompanies that manage tens or hundreds of thousands of SKUs should use a replenishment system explicitly tailored to their operations to make automated replenishment more accurate, efficient, and cost-effective. Replenishment ordering or buying is decentralized and often handled by local managers.The total cost of product replenishment needs to be lower.On-shelf availability levels are unacceptably low (or aren’t measured), resulting in lost sales and lost customers.Significant capital that could be better used elsewhere is tied up in excess inventory.The benefits become more significant if a company carries thousands of products, and gains multiply further when there are several warehouses or stores to manage.Īutomated replenishment improvements are especially beneficial for businesses where: The more SKUs a company manages, the bigger the return they will see from getting the store replenishment process right. More and more frequently, this is achieved by combining advanced inventory and safety stock optimization with accurate forecasting procedures to balance inventory while maximizing sales.Īlmost every company sees a return from optimizing their store replenishment processes within months, regardless of the types of products they sell. Replenishment optimization is the process of improving the accuracy and efficiency of a store’s replenishment operations to reduce costs and increase profitability. The case for automated replenishment optimization Businesses that optimize their demand forecasting, inventory management, and order cycle and quantity setting will achieve better efficiency and higher accuracy in their replenishment processes - not to mention greater profitability. The increasing popularity of auto-replenishment is largely due to the speed and ease with which retailers have achieved significant gains, often amounting to savings of several percentage points of total turnover.Ĭompanies require automated replenishment to survive in an increasingly complex supply chain, which makes it essential for retailers to continually focus on replenishment optimization. Improved store-ordering accuracy and effectiveness have a major impact on sales through shelf availability and reduce handling, storage, and wastage costs in stores and other parts of the supply chain.Īccurate, item-level control is virtually unachievable with manual store ordering, which is why automated, system-assisted replenishment has become the default option for companies who are serious about replenishment optimization. Higher-profile activities such as buying, merchandising, and marketing often overshadow replenishment, despite the latter’s major impact on profitability. Store replenishment is often overlooked when speaking in retail operational terms.
0 Comments
Leave a Reply. |
AuthorWrite something about yourself. No need to be fancy, just an overview. ArchivesCategories |