Inventory replenishment: what are the main strategies?

<strong>Inventory replenishment</strong> refers to the process of restocking warehouse shelves after <a href="/blog/phases-goods-processing">receiving new goods</a> from production or suppliers. It can also apply to the <strong>movement of materials from the storage racks to the picking shelves</strong>.

Stock replenishment should be organised taking into account the rest of the tasks carried out in the installation. The objective is to strike a <strong>balance</strong> between the <strong>priorities dictated by service</strong> and the <strong>restrictions imposed</strong> by the warehouse (particularly regarding space).

Main strategies for replenishing stock in the warehouse

The ultimate goal of inventory replenishment consists of preventing a situation in which the operator goes to pick a product and finds an empty <a href="/warehouse-solutions">shelf</a>. There are three main methods:

1. In-demand stock replenishment

When replenishing in-demand stock, <strong>products that make up daily purchase orders are taken and placed on the picking shelves</strong>. This inventory replenishment approach is normally used when orders are prepared according to <a href="/blog/wave-picking">wave picking</a>. In this way, when the restocking phase begins, the SKUs picked are those that will subsequently be packaged and prepared for shipment in the following wave.

<strong>Replenishment of in-demand stock is dynamic and continuously adjusted in each wave</strong>. This type of restocking is mainly used when:

• The <a href="/blog/picking-area-warehouse">picking area</a> doesn’t have enough capacity to store products for every SKU.
• <strong>Demand is highly variable</strong> and, thus, difficult to predict.

2. Replenishment based on minimum stock levels set

With this method, <strong>stock replenishment</strong> is activated every time <a href="/blog/minimum-stock-levels-definition">minimum inventory levels</a> are reached in a picking location. This procedure minimises restocking trips, reserving them for when they’re strictly necessary.

This method is recommended when:

• <strong>Demand for the SKUs is stable</strong> or their <strong>turnover is low</strong>. Since these products aren’t frequently moved, they don’t have to be resupplied immediately. Therefore, it’s possible to dip into a specific amount of <a href="/blog/safety-stock-optimise">safety stock</a>, using that number as an indicator of when to replenish these goods.
• There’s <strong>enough space</strong> on the picking shelves.

3. Top-off (or lean time) inventory replenishment

<strong>Top-off inventory replenishment</strong> leverages fluctuations in order preparation activities in the installation to restock the picking shelves. It’s an <strong>extremely flexible replenishment method that optimises workflows</strong>. It can also be employed to supply goods in advance if the warehouse is experiencing a period of low activity and is awaiting a new wave of orders.

The major difference with respect to the previous type mentioned is that, here, goods are replenished continually, without having to wait until a minimum stock threshold is reached. Top-off replenishment is particularly used:

• For <strong>SKUs with a very high turnover</strong> that are picked continuously.
• <strong>When picking is very intense</strong>, in which case top-off replenishment serves to avoid the restocking step prior to goods extraction. In this way, time is maximised by following <a href="/blog/lean-logistics-definition">Lean logistics</a> logic.

Inventory replenishment: organise it with a WMS

When organising inventory replenishment, <a href="/software/warehouse-management-system-wms">a warehouse management system</a> is a very helpful tool. Typically, a combination of methods is adopted based on <a href="/blog/what-is-stock-turnover">stock turnover</a> and the particular demands of each order.

In this vein, warehouse management systems allow you to design <strong>goods replenishment strategies according to logistics parameters</strong>. The program itself will distribute the times and tasks for picking and inventory replenishment to optimise both processes in the warehouse, limiting inefficiency as much as possible.

<strong>Mecalux’s Easy WMS</strong> is equipped with powerful stock control and replenishment functionalities. To find out more, <a href="/software/warehouse-management-system-wms?_from=BLOG#corporate--demo--request" data-track-event-category="Blog CTA" data-track-event-label="Textlink-bottom" rel="nofollow">don’t hesitate to contact us</a>. One of our experts will provide you with a personalised demo with your configuration options.