Replenishment
The primary task of replenishment is to manage material flows and inventories so that all orders are reliably delivered on the agreed date at minimum cost. To this end, all tasks to be completed are distributed to the available resources.
What is replenishment?
The term replenishment comes from Latin and means division, arrangement, management or allocation. In logistics, replenishment describes demand management and the decisions that flow into the manufacturing process. This includes the allocation of orders to inventory in terms of quantity. The person who implements these decisions and orders is considered to be the MRP controller. Replenishment is carried out in the company's warehousing, transportation and purchasing departments.
What are the functions of replenishment?
The replenishment has the function to allocate the activities in a company in a planned way. An MRP controller must allocate tasks and resources to the available resources in such a way that they are optimally utilized. Time and cost savings are the main factors in replenishment. Depending on the size of the company, replenishment may be handled by an entire department or by individuals. The tasks include:
- Controlling the flow of materials and inventory
- Reordering of goods
- Ordering of required raw materials
- Personnel management
- Control of financial resources
- Meeting delivery deadlines with minimal cost input
- Order acceptance
- Coordination of resources
Why is replenishment important?
Replenishment is especially important for the manufacturing sector. The scheduler in the warehouse of a manufacturing company keeps production flowing by allocating available resources to avoid delays. However, replenishment is not only important in a company's warehouse. It comes into play as early as project planning and product shipping. Without a scheduler in the planning phase of a project, it is impossible to calculate which distribution of resources would be the best. If a mistake is made at the planning stage during costing, the entire production process can come to a standstill.
What does automatic replenishment mean?
Emotional decisions or acting on gut feeling are no longer sufficient in view of the complex requirements of modern replenishment. Due to a multitude of different influencing factors and the resulting flood of data, replenishment is becoming increasingly comprehensive, which is why many companies are turning to software tools. Automated replenishment software takes care of replenishment for routine ordering processes and helps to optimally invest in materials and goods in order to generate the maximum return for the company. This allows the MRP controller to concentrate on decision-relevant and strategic tasks. Thanks to the linking of inventories, requirements and sales forecasts, replenishment is controlled specifically according to the respective requirements. The inventories, which are optimally aligned with the respective requirements, ensure lower costs and higher yields. The time-consuming manual processing of order proposals is eliminated with our software for automatic replenishment. Orders can be placed both within a company, i.e. from the warehouse to the individual branches, and to external suppliers.
What does a replenishment software do?
Automatic or automated replenishment software takes most of the inventory management tasks off the dispatcher's hands. With the help of ERP or logistics software, automatic replenishment creates the necessary order processes for resources and goods, which only need to be checked and released by the dispatcher. The software should provide practical tools for these classic activities, such as the creation of bills of materials or purchase orders. This clear form of data processing and presentation frees up time and resources, which in turn can be used for other administrative tasks.
Of course, software also has great potential in terms of autonomy. Alone because the capacities for data processing are naturally much higher than those of a "normal" dispatcher. Modern software is therefore capable of always taking into account all relevant data to design orders in such a way that they are optimally economical. Relevant data includes current stocks and open orders, minimum order quantities, delivery times, container utilization or sales size units. The user decides whether the order proposals are to serve as a template for manual orders or whether the orders are to run completely independently. If you have several locations, for example as a large retail company, the daily changes in demand on site will influence your store planning. Ensuring optimal item availability is therefore an extremely complex challenge. However, with the help of powerful scheduling software, you can meet this challenge at any time. Innovative software has mathematical models for forecasting demand in a warehouse. So you know today what needs to be ordered tomorrow to avoid possible shortages or even stock outs. On the whole, automatic replenishment makes a replenishment manager's job a lot easier, which is not least an advantage because the requirements and complexity in replenishment are constantly increasing.