Four Top Tips For Better Allocation And Replenishment
If you don’t have the world’s best allocation and replenishment software there are still things you can do to improve your allocation and replenishment effectiveness. Here’s four of Martec’s top tips:
- Use your ABC analysis and focus on the A SKUs responsible for the most sales. These are the best sellers and often the best overall gross margin, but they are the SKUs most likely to be out of stock.
- Shorten the cycle time as much as you sensibly can – it helps reduce cycle time stock, it reduces forecast error (typically making a bigger impact on safety stocks than cycle time stocks) and it reduces stock outs and lost sales.
- Watch for problems you create yourself. For example, if you send one of a size 8 to a store and your mannequins are size 8, you effectively made the store out of stock immediately. If you are an own brand retailer and you can specify your own pack sizes, avoid creating packs which individually are too many weeks of sales in any one store. If your minimum display quantity (MDQ) is too many week of sales in a store and you round up initial allocations to the MDQ too often, investigate alternative ways of displaying the product. Your web site can often play a role in this.
- Avoid as much non-productive work as possible. So, if you use Min/Max, don’t plan for staff to re-set the Min and Max periodically. If they are time pressured (and who isn’t), it won’t happen or it will be rushed.
If you’d like more best practice advice check out our allocation and replenishment e-learning course.
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Posted by Brian Hume
1st December 2018
