Timing is everything when it comes to inventory replenishment and ordering inventory from suppliers. If your supplier doesn’t deliver goods on schedule, then you won’t be able to meet demand and fulfill orders. 

On the other hand, should your supplier deliver more goods than needed for sales, you’ll suffer higher inventory carrying costs and even a warehousing space crunch.

Finding the right balance isn’t as easy as it used to be. The cost of getting it wrong keeps rising. Automating your inventory replenishment will provide the fastest, easiest, and cheapest way to ensure product availability.

Challenges with manual replenishment

If it’s manual, it’s prone to human errors and inefficiencies. With manual replenishment, your staff must constantly stay on top of inventory changes and customer demand while ordering from various suppliers and arranging multiple deliveries. 

The solution is to optimize the process by adopting a supply chain planning solution that eliminates spreadsheet/paper-based replenishment activities.

Why replenishment must get faster

Efficient inventory replenishment is essential to customer experiences and the financial health of your business. Excessive stock ties up working capital while insufficient inventory results in missed sales and lost revenue. Moreover, if you hold excess stock, you’ll also incur the financial burden of higher warehousing and inventory carrying costs. 

Replenishment automation ensures the right amount of inventory via a well-executed process for determining your stocking requirements. 

The inventory replenishment process

  1. Identify what you need to order.
  2. Identify quantities on hand across locations.
  3. Don’t make assumptions.

Inventory replenishment starts with knowing what you need to order. Good demand planning ensures you order the right mix and quantity of products to ensure availability. Demand planning systems analyze real-time sales and orders to forecast inventory needs and identify buying trends with enhanced precision.

Next, you need to know what products you have on hand. This helps you order the correct quantities for resupply to maintain your customer service levels. You’ll need real-time visibility into on-hand inventory across all your stocking locations, a capability found in next-gen warehouse management software.

WMS platforms deliver a clear picture of changing demand and available inventory. This significantly streamlines the chore of determining what products you need to order from your suppliers against desired service targets. 

In fact, without a comprehensive view of demand and supply, you’ll find yourself making assumptions about your inventory planning needs, which will result in either over-ordering or under-ordering. 


Lead times and product availability

Even with an accurate assessment of your restocking requirements, you can still run into inventory replenishment problems if the products don’t show up in time at your warehouse. 

When procuring products from suppliers, you have to account for lead times, the period from when an order is placed with a supplier until the product arrives at your warehouse. 

Factoring in transit times for replenishment shipments is essential to maintaining adequate inventory levels and avoiding storage capacity issues. Understanding the delivery timeline helps you set up a pipeline inventory flow. This lets you prepare for the arrival of inventory and have enough storage space in the warehouse to accommodate the goods. 

Proper pipeline inventory flow is also crucial to managing inventory turnover as your replacement products arrive just in time to support sales without having a large cushion of safety stock. It also helps to avoid the huge transportation expense of making emergency shipments to keep your warehouse supplied.

Must-have automation features

Automating inventory replenishment helps overcome financial challenges as well as people challenges – particularly when labor is short. With a supply chain planning system automating the process, you can trigger an order for restocking without human intervention when inventory for a particular product falls below a certain level. 

The inventory threshold for reordering also factors in supplier lead times so shipment deliveries arrive on schedule to maintain product availability.

Key replenishment features in your inventory replenishment solution should include:

  • Track inventory at the stock-keeping unit (SKU) level in real time across all stocking locations 
  • Use a granular demand forecast based on actual sales and orders to determine your future inventory needs
  • Account for supplier lead times in scheduling replenishment to ensure timely delivery
  • Select the most reputable suppliers with a track record for quality products and reliable delivery
  • Initiate orders with suppliers automatically without involving manpower
  • Consider building storage capacity during ordering so you don’t run into a warehouse space crunch

Optimize available-to-sell and cash flow from multiple warehouses

Auto replenishment enables you to optimize inventory flow from multiple suppliers to your warehouses to improve product availability. Because the system submits orders automatically on your behalf, you save on labor costs and free up your staff for other duties such as strategic planning.

The system helps ensure supplier performance because it subjects supplier selection to discipline, choosing vendors based on your criteria for cost, quality, and adherence to delivery schedules. The system can also impose discipline on supply procurement to ensure budget compliance.

An automated inventory replenishment system helps you establish a more accurate budget for determining the quantity of each product needed to replenish stock. With that information, you’re in a better position to monitor your finances and improve cash flow.

Inventory execution and planning in the same platform

A connected platform such as Deposco that includes both supply chain execution and planning features, like demand planning and inventory replenishment, gives you ultimate visibility, control, and throughput of the entire restocking process from end to end. 

Because Deposco provides real-time visibility into customer demand and inventory across the warehouse network and extended supply chain, it has the requisite capabilities to drive automated replenishment and ensure a steady pipeline inventory flow of just the right amount of products.

By leveraging this end-to-end system to replenish stock, you’ll gain the following benefits:

  • Increased product availability
  • Improved fill rates
  • Higher inventory turnover
  • Reduced staffing
  • Fewer mistakes, overstocks, and out-of-stocks
  • Better inventory cycle management
  • Faster order-to-cash conversion
  • More working capital
  • Heightened sales and customer satisfaction

Balanced inventory grows profitability

Replenishment optimization is essential today for achieving operational efficiency, satisfying customer demand, and ensuring profitability.

By automating the replenishment process for a steady flow of the right products into your warehouses and fulfillment centers, you’ll maintain the optimal inventory to minimize costs while meeting customer demand. Schedule a demo with us to simplify and accelerate your operations.