Replenishment Planning allows the creation of a responsive system that reacts rapidly to the needs of the market; such systems ensure high degree of Service Levels with the customers while simultaneously maintaining low levels of inventory across the Supply Chain.
Most of the Planning in Sales and Operations Planning is Push Based wherein Production moves in line with Demand and creates Inventory that is used to service the market. However, in case of companies that are flexible and can produce goods in short time spans and in small batches, it is possible to create a Pull System. In such a Pull system, a Production unit’s production schedule may be directly linked to inventory levels in the Supply chain such that when the inventory dips below a level then it triggers an order which is produced at the manufacturing unit. More often, the Production unit is connected to the Supply chain inventory through a factory buffer stock. However, here as well, the order is generated in a Pull mode. As soon as the factory buffer stock depletes below a certain level, it will trigger an order for production.
Our solution uses statistical methods to dynamically calculate the Reorder Points, Safety Stock levels of inventory across a multi-echelon supply chain network. It also allows for other methods/strategies for calculating the Reorder points including days of inventory, categorization of SKUs and application of different calculation methods. By default, the order quantity is calculated statistically using the EOQ. However, our solution also provides the flexibility to create different parameters/measures for the order quantity.
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