 Features and Benefits
- Forecasting – Time-phased view of expected demand by SKU/location
- Automated Promotional Execution – Lift can be applied by time period. The solver will factor in the expected increase in demand when creating the replenishment plan
- Suggested Purchase Orders – Recommended purchase order quantities are generated based on the aggregated demand, lead time, and constraints of the vendor or purchase order group
- Group Order Building – Purchase orders can be built across a group of items to meet vendor constraints. This often involves building truck load orders or vendor minimum order quantities/volumes
- Suggested Stock Transfer Orders – Based on parameters such as store demand, safety stock, and lead time, the solution creates recommended transfer orders of goods to stores from their respective servicing distribution centers
- Inventory Planning – Service levels can be defined based on each item’s ABC classification and the system will dynamically calculate appropriate safety stock and required inventory levels
- Inventory Optimization – Users can define business goals and constraints as system parameters, which are used to drive optimal inventory levels
- Connected Supply Chain Model – Goods can follow multiple flow paths: direct from vendor to store, stocked at the distribution center (DC) for future store replenishment, or cross-docked/flowed through a DC from vendor to stores
- Flow-Through Distribution – For vendors with consistent supply, the DC inventory buffer can be removed and regular stocking orders will flow through the DC with re-allocated quantities to meet ever-changing store replenishment needs
Demand Forecasting
Demand forecasting is based on a rich set of statistical algorithms to predict future demand. A time-phased view of expected future sales forms one of the key drivers to the replenishment plan. Today’s retailers deal with seasonality, new product launches, and promotions, which can cause complications when attempting to predict future sales. The i2 Store Replenishment as a Service mid-market offering solves these challenges and selects a statistical model that fits the sales and forecast history.
Automated Promotional Execution
Since promotions are the norm for most retailers, Store Replenishment as a Service has workflows that take into account the anticipated future lift from promotions. The percentage or quantity of lift applied by the user across the promotional period drives the downstream replenishment requirements to support the expected increase in sales.
Suggested Purchase Orders
The Store Replenishment as a Service engine considers many factors in determining when to order more product and how much to order. Such factors include: future demand, demand variability, store shelf capacity/presentation requirements, safety stock, lead time, lead time variability, vendor order review frequency, and truckload constraints. The planning engine will attempt to make sure that additional product arrives prior to the inventory falling below the safety stock level at any location. The system uses an exception-based approval process. Based on a set of user parameters, most purchase orders will be automatically approved and sent on to the purchasing system. In the case of high-dollar POs or other business-defined exceptions, user approval can be required.
Group Order Building
Once the purchase order details are generated, there is an additional process to group these lines and update quantities to meet vendor constraints. Multiple lines can be aggregated to a single PO with the quantities adjusted to meet transportation requirements. If quantities need to be adjusted up or down to meet truckload limitations, the software will balance the days of supply across all items on the PO.
Suggested Stock Transfer Orders
The system supports calendars by location so that internal order dates can match the transportation plan. Warehouses can have days and hours of operation along with lead times to account for picking and loading an order. Stores can also set up the calendar to reflect days that they are available to receive product. Based on the calendar, lead times, and cycle time until the next order review, the system will generate suggested stock transfer orders from a DC to a store.
Inventory Planning
The manual approach used by many small to mid-market retailers is to periodically adjust a store level min/max. This process is time consuming, prone to human error, and can fail to take into account the strategic importance of an item. Store Replenishment as a Service realizes that min/max levels should be generated in the context of demand, demand variability, lead time, lead time variability, and the desired customer service levels to be achieved within certain category groups and/or item classifications. Since all of these critical elements are widely variable by product type, supply channel, vendor, etc., the software automatically calculates the appropriate reorder points for each item at each location.
Inventory Optimization
Although most retailers share a common goal of maintaining minimal inventory levels, most inventory management decisions in some way affect (good or bad) both the top-line growth and bottom-line performance of the company. i2 Store Replenishment as a Service provides the visibility and the means by which inventory levels can be automatically optimized as an ongoing practice, rather than an occasional financial focal point.
Connected Model
The Store Replenishment as a Service engine solves the replenishment problem across the entire supply chain in a single optimization run. With today’s complex supply chains, this ensures that the solution optimizes inventory for every level of the supply chain, up through the product-location hierarchy and into future ordering/delivery periods. This approach also supports multiple distribution models such as direct to store, DC to store, and flow-through/cross-dock from vendor to DC to store, or vendor to DC to DC to store.
Flow-Through Distribution
The goal of flow-through distribution is to eliminate the need to warehouse potentially unnecessary days/weeks of inventory in the supply chain. Items meeting criteria for flow-through would no longer be stocked in the DC. Instead, vendor orders will be aggregated for all stores, and shipped from the vendor to the DCs as needed and just in time to fulfill expected demand at stores. The aggregated orders are received at the DC and the entire receipt quantity is re-allocated based on the most current store demand requirements and is then pushed to the stores. The timing and quantity of these aggregate orders is handled by the solver. The outcome of moving an item to a flow-through model will be a slight increase in store inventory as the solver accounts for a longer lead time, but results in a complete removal of inventory at the DC.
Allocation of Scarce Product
When product is in short supply, it is critical to get the limited supply to the correct locations. The solution allows for product to be divided according to:
- Proportional to need
- Proportional to greatest need
- Priority rules. For example: “First fill presentation stock for all stores,” “Next fill safety stock for all stores,” “Next fill order up to level for ‘A’ stores,” and so on.
Want to learn more? Contact Us, call +1-800-800-3288, or contact your nearest i2 sales office.
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