Auto Replenishment System Checklist

Comparing vendors of automated replenishment system? Make sure to ask them these questions.

 

  1. Is the system supporting pick-to-zero order methodology?
    Context: According to this scheme orders from Distribution Center (DC) to stores are recalculated after the goods arrive at DC and sent on the same day to stores. This is the key difference of this scheme to cross-dock scheme, when you don’t recalculate the orders after the goods arrive at DC. The lack of pick-to-zero support for fresh products means an increased risk of write-offs. For other goods it increases the risk of less accurate stock distribution, OOS and overstock.

  2. Is ordering of ingredients according to recipes supported for SKUs manufactured in-store, for example coffee, cookeries, bakeries?

  3. Is it possible to control the expiration date for goods in stock according to the FIFO method?
    Context: This helps prevent lost sales. After removing the overdue product from the shelf, stores may not be able to keep up with write-offs which delays orders. Additionally, at the time of making an order the goods on the shelf can be within its expiration dates. It is still necessary to control for the expiration dates since they may become overdue before the next delivery date.

  4. Is limiting order volumes for goods approaching expiration date supported?
    Context: This minimizes write-offs for stores where presentation stock is too large relative to forecasted sales and number of goods ordered approaching expiry date.

  5. Is it possible to manage expiration dates in the system so that the product is ordered based on the forecast that a certain share is sold before the expiration date? 

  6. Is it possible to manage the maximum allowable write-offs in the system in order to ensure the stock presence for example for food preparing?
    Context: Let’s take some kinds of salad as an example. They sell slowly and have a very short shelf-life (i.e. expire by the end of the day). Sometimes retail chains still want to keep certain quantities on stock despite a very high probability of write-offs.  The aim is keeping a presentation stock. It can also be relevant for goods with longer shelf-life that sell slowly.

  7. Does the system automatically analyze the reasons for the lack of goods on the shelf (underdelivery, write-offs, returns, no order schedule, no binding to contracts/specifications, limited packaging by expiration date, insufficient order, etc.)? Can you break down your out-of-stocks by these reasons?

  8. Does the system allow for checking if ordering for any good in the assortment is possible? Does it indicate the reason for good where it is not the case and the actions needed to be performed for the product to be ordered (i.e. start a binding, start a schedule, start a recipe)?

  9. Does the system support the ability to manage the target of safety stock, in order to provide an increased level of product availability for KVI positions? Is the product shelf-life automatically taken into account in order to avoid the write-offs?

  10. Does the system support the ability to automatically increase orders to stores for products with demand spikes due to upcoming promos and seasonality, without the need to manually calculate the increased amount of goods to be ordered for such periods or manually entering any numbers for uplift factors?

  11. While calculating orders from suppliers to DC, is the system taking into account separately for each store factors such as: presentation stock; safety stock; sales forecast; DC to store delivery schedule; DC to store minimum order quantity?Does the system forecast the future stock levels in order to make the supplier to DC order more accurate?

  12. Does the system have the ability to dynamically choose the size of the package (small package, medium package, big box) for DC to store deliveries in order to automatically find the best balance in the warehouse picking costs versus costs of money in a time, while taking the risk of write-offs into consideration?
    Context: When the sales of an item are about to increase before promo or seasonal spike, it makes sense to ship bigger packages before the promotional and seasonal periods to reduce the warehouse workload and picking costs

  13. Does the system provide any means to optimize the cost of assembling goods at the distribution center without manual adjustments of minimum and maximum quantities. Are the seasonal and promotional spikes taken into account?

  14. Does the system support ordering goods using the reorder point formula (own import, other goods with long delivery to DC time) while:
    - forecasting future stock levels,
    - taking into account logistics costs optimization (weight, number of pallets, volume),
    - minimizing stock days.

  15. Is the bull-whip effect taken into account in the accidents of OOS at the DC?
    Context: In case of not fulfilling orders from DC to store for one item, this can increase the sales of its substitutes. This may bring the substitute SKY stock to the safety stock and then to presentation stock. If the substitute SKU sales grow by over 100%, that can lead to increase the size of next orders from DC to stores 200-300%. Stores will make larger orders not just because the sales increase, but also to replenish the washed-out safety and presentation stock. That can lead to cycles of moving from OOS to overstock at DC, if the past DC shipments are used to forecast orders from DC to suppliers. It may be prevented by forecasting the stock balance of DC and the stock balance of every store 30-40 days ahead.

  16. Does the system support the push distribution strategy (distributing a fixed amount of goods from DC to stores)? Is it taking into account the forecast and the inventory balance of each store in push distribution mode?

  17. Is it possible to forecast the sales and order new SKUs automatically (whether the user has entered the analogue SKU or not)?

  18. Is it possible to perform automated sales forecasts and ordering for goods that were previously present only in part of stores and now start sales in more stores without the sales history at these stores?

  19. Is it possible today to check the orders of stores to DC or to suppliers that will be generated in the future?

  20. If the system can calculate the future forecasted order needs, is it possible to measure the accuracy of these forecasted orders?

  21. Is it possible to see items that stores will NOT order in the next 20-30-40 days due to overstock?
    Context: This helps with not classifying as an overstock, positions for which a retail chain has an agreement with a supplier about a certain level of presentation stock. 

  22. Is it possible to estimate the stock turnover excluding the presentation stock?

  23. Is it possible to track the presentation stock change history?

  24. If today’s order from store to DC exceeds DC stock on-hand, can the system redistribute the order size between the stores based on stock and sales of every store, targeting to optimize the store stock distribution?

  25. Does the system support the functionality of DC/suppliers personnel holidays and automatically orders more outside the schedule before the holiday starts?

  26. Does the system allow for dealing with situations where not the entire order of the DC to store fit into the truck and some goods remained at the DC waiting for the next shipment?Context: Especially relevant after the period of DC being OOS and the stores ordered more than usual.