Retail Inventory Allocation & Replenishment Working Together
Not only is allocation a key function to move product to stores; replenishment also has a part in this process. Allocation deals with the beginning of a merchandise assortment season and is used to get initial inventory level into channels. Replenishment can take over from there “pulling” inventory based on actual sales data.
To maximize sales and improve service levels while lowering inventory investments, retail inventory replenishment software complements the allocation process. Once the performance of a product or category is determined, replenishment makes sure that inventory stock is available in stores to meet on-going demand. A best-in-class replenishment solution will result in improved inventory turns and in-stock availability providing your customers with the products they want, when and where they want them.
Retailers need to look for a solution that produces a forward-looking, time-phased ordering plan that include the demand forecast and inventory plan. A flexible and effective solution will take into account safety stock, fluctuating demand, vendor minimums, seasonality and lead times, as well as any other factors needed based on your own business requirements. Ultimately, this important step in the process maintains proper inventory flow downstream while optimizing order and line-item fill rates to avoid overstocking.