Replenishment

We now study the remaining processes within the warehouse. These include replenishment, value-adding services and dispatch, together with the peripheral but essential tasks of stock counting and housekeeping.

Inventory replenishment process analyzes supply and demand to help manufacturing and distribution organizations improve order and line item, fill rates and optimize their overall inventory management performance. The inventory replenishment process considers a variety of criteria such as on-hand inventory, customer demand, and supplier lead times to calculate requirements and generate online requisitions, purchase orders, and inventory transfer requests.

Replenishment is the activity of transferring goods from reserve stock (or sometimes directly from goods-in) to the picking face. Both the efficiency and accuracy of picking are greatly affected by the replenishment operation. If picking stock has not been replenished to the pick face then an order requiring that SKU cannot be completed. The picker will have travelled to a pick slot unnecessarily and the customer will be dissatisfied (or the picker will need to return to the slot again once the goods have been replenished). Similarly, if goods have been replenished to the wrong pick slot then the customer is likely to receive the wrong goods (depending on the checking procedures in place).

Replenishment includes

• MRP AND DRP compare available inventory with current and future demand to predict expected shortages over time.
• For manufacturing organizations, it includes bills of materials, routings, and production capacity to generate a tentative production schedule.
• Supports review of purchase requisitions to generate purchase orders and inventory transfers
• Compares available inventory with current and future demand to predict expected inventory shortages over time
• Replenishment rules include minimum-maximum reorder point, safety stock levels, line item fill rate, and service level
• Supports approved suppliers, contract terms, blanket orders, and contracted purchase amounts
• Accounts for vendor lead times and order requirements
• Demand consists of customer orders and forecast which can reflect seasonal business trends

It is important to design the replenishment task not only so that it is effective but also so that it does not interfere with the picking task, particularly in high throughput operations. Otherwise the replenishment operatives may interfere with, and slow down, the order pickers. Methods to overcome this problem include

• Setting out separate replenishment and picking aisles. These may be laid out as alternate aisles with, for example, replenishers filling carton-live storage from the rear and pickers picking from the front. A similar layout is possible using ground-level palletlive storage.
• Undertaking the replenishment and picking tasks at different times of day. For example, if picking is undertaken in the evening ready for next-day delivery then it may be possible to carry out most of the replenishment before the picking task begins. In the case of carousels it is essential that these tasks are undertaken at different times as the same access point is required for both tasks. Another example is where picking occurs from ground-level narrow-aisle racking (which is found in some operations as a result of severe space constraints). While this should be avoided if possible, where it does occur, then low-level order picking should not take place at the same time as narrow-aisle truck putaway and replenishment tasks (for health and safety reasons).
• Having multiple locations for fast-moving goods, so that replenishers and pickers are not operating at the same pick slot.