Inventory Replenishment Strategies – How Technology Can Be Put To Good Use
Inventory replenishment or stock replenishment is one of the critical components in any inventory management plan. To be sure that your customers get their orders on time and to ensure smooth flow of supply chain processes, you need robust stock replenishment strategies.
There are so many ways to handle timely replenishment of the stock in your inventory. But did you also know that technologies like AI or artificial intelligence can be used to strengthen these ideas? Let’s talk about the optimized refilling of the inventory stock.
Understanding the many ways to tackle inventory replenishment
1. Improved demand forecasting for demand based replenishment
Demand-based stock replenishment is a very practical approach. There is no risk of overstocking without demands and low stock issues can also be averted. In this method, the reordering of items to replenish the inventory happens based on the demand projections made. As a result, if there is a sale or seasonal demand surge that businesses usually face, timely stock replenishment can help meet the fresh orders.
With technologically sound inventory management in place, you can make use of machine learning models for demand forecasting. These help in improving the accuracy of demand forecasting and therefore give a more sensible approach to reordering based on projected demand.
2. IoT incorporated inventory tracking for replenishment based on reorder point
This involves continuous tracking of the inventory status. Orders are placed for new items when the stock falls below a predefined level. There is no burden on inventory due to overstocking. But the problem is that every single order has to be tracked. Sometimes, the order frequency might change and the items might be more in demand than usual. As a result, the tracking of the stock becomes quite tedious. This is where the inventory management approach involving the use of the internet of things comes into the picture. With IoT real time tracking of every single item in the inventory makes it possible to instantly update the stock status. As a result, a more effective and timely way to reorder items based on the stock availability in the inventory would be possible.
3. Automating orders for periodic stock replenishment
Periodic stock tracking is one of the oldest and the easiest approaches that several businesses use. In this case, the stock in inventory is checked periodically and any shortage is immediately replenished. But sometimes, this can lead to delays because of time lags in order placement. Businesses can overcome this by automating the order process so that orders are immediately placed periodically. Another approach would be to combine the above method of reorder point replenishment to keep tracking the stock real time and then automating the ordering process.
Inventory replenishment becomes so much more effective when you combine the merits of all the above strategies. By investing in a strong inventory management solution you gain access to real-time tracking of stock, automation of tasks and better demand forecasting all in a single module. With this, businesses struggling with order delays and inventory issues would be able to elevate the standards of their inventory management.
