What is Replenishment Planning?
Every enterprise decides the level of inventory it should carry to have efficient and undisturbed sales. At times, with less or no stock, customers would turn down the offer and may move to the competitor for a product of similar nature. A Replenishment Planner, thus, comes into the picture to ensure that the flow of goods is continuous and uninterrupted.
There are various definitions of ‘Replenishment Planning’ but just to oversimplify it, we can say that it is the process of stock restoration to an adequate level thereby achieving the highest possible fill rates. This movement generally happens from Upstream to Downstream. In short, let us say when the available inventory is below the desired level, we pull the stock from Central Warehouse and push them to Regional Warehouses or Distribution Centers.
This could happen with the help of Replenishment Planning experts but, do we consider our organization’s purpose for deploying this crucial planning process.
When we take a deeper look, we may observe that it is equally important to analyze the impact on our capital and revenue that could take place because of Stock Replenishment activities.
Why is Replenishment Planning important?
To understand the purpose, let us ask a few questions to ourselves as ‘Replenishment Planners’,
Q1: How much of excess inventory do we hold?
This will tell us the working capital being blocked.
Q2: Do we have a shortage of stock at any distribution center?
This will tell us about the potential lost opportunities
Q3: How much inventory will I have after Replenishment?
This will tell us the Market Visibility that I could promise the Sales Team
While conducting Replenishment Planning using ValQ, Modern Visual Planning for Microsoft Power BI, you get to see the answers for such type of questions. This is very intuitive that allows planners, analysts, and decision-makers to make decisions on-the-fly.
Stay tuned for our next blog which will focus more on other factors that drive the Replenishment Planning process.
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Webinar dated 5th Feb-2020 (Asia Pacific). Click here for registration.
Webinar dated 6th Feb-2020 (the US and Other Regions). Click here for registration.
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