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What can replenishment teams do to assist warehouse operations?

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Liz Murby, MD and principal supply chain consultant at Numina Consulting, poses and answers the question.

fullsizeoutput_177b.jpegWhen I was trained in the role of a reorder planner years ago, the focus was ‘optimising inventory levels’ - holding enough stock to achieve a specified service level, but not holding too much stock that ties up capital unnecessarily and increases the risk of waste.

Over the years I’ve been happy to see that reorder / replenishment departments look beyond their own KPI’s and consider the wider supply chain such as warehouse operations.  Reorder can have a significant impact on the efficiency of the warehouse operation and whilst this is good reason in itself to inform behaviours, it of course of benefit to Reorder if goods are received swiftly and are available to pick without delay, that date sensitive product is managed well to avoid waste and so on.  

Here I outline some areas where Reorder can assist the warehouse operation with examples taken largely from Grocery experience, but applicable to most businesses.  

Product Information
Getting product details right impacts the whole operation from receiving through to putaway and pick. Setting up (and maintaining) the correct Ti Hi (layer quantity and number of layers), dimensions, weight, despatch/supplier pack size and barcodes can make the difference between a swift receipt of product and a longer process requiring investigation and escalation.  

Having accurate stock rotation discipline and date information ensure date checks on receipt are efficient and stock is rotated appropriately.

Order Multiples
Whilst from an inventory management view you would order whatever you need of the product (if there are no supplier minimums to adhere to), it makes no sense at all to order 26 cases if 25 fit on a layer.  It is good practice for Reorder departments to have a policy of ordering a full pallet where practical (depending on the life of the product); if not practical  then they order a layer. This results in reduced manual handling of the product in the warehouse, and despite the increased stock-holding, gives better warehouse space utilisation. 

Order Frequency
Whilst a supplier may be happy to deliver 4 pallets of stock three times a week, it is worth reorder considering a weekly order and delivery in this instance, as long as the life of the product allows.  This saves Goods In slots and repeated handling of product, particularly if the same product is on all three deliveries.  This links in with order multiples; it will be easier to order in layer or pallet quantities if ordering less often.  Of course, this needs to be balanced against Reorder stockholding KPI’s and space availability in the warehouse. 

Space Consideration
Whilst Reorder are likely to have stockholding KPI’s which theoretically should help keep inventory at a manageable level in the warehouse, there should be an ongoing consideration of the current capacity in the warehouse in terms of space, number of available reserve slots etc and orders should be placed with this in mind (or capacity issues addressed such as using outside storage etc).  Being mindful of stockholding on bulky lines will also help with space constraints. 

The warehouse and Reorder should review together the expected intake and pick volumes and assess the impact this will have on space (and Goods In).  This is especially vital at peak periods.  Again this is in everyone’s interest as running out of space has a negative impact of product flowing in and out and therefore service level.  

Goods In Scheduling
Businesses vary in terms of whether Reorder or the warehouse are responsible for booking in deliveries.  If Reorder are responsible for the scheduling, they need to adhere to the Goods In shift capacity and consider the difficulty of handling of a delivery when assigning times e.g. full pallet delivery v handball. 

Even where Reorder do not book in the deliveries, they can help the warehouse by spreading PO due dates throughout the week to prevent congestion on certain days. Smoothing / phasing intake at peak times can help avoid issues.

Supplier Conformance
The warehouse will encounter various non-conformance issues such as poor presentation of stock, date issues etc.  Whilst they may manage some of these themselves they should be able to escalate issues to re-order and have their support in resolving them.  Reorder may in turn need to involve commercial teams in dealing with repeated offenders.   

Removing Excess Stock
Slow-moving, overstocked (e.g. residuals from promotions) or discontinued lines take up valuable warehouse space.  Reorder can help identify these lines and take pro-active action to clear them (escalating where required to Trading or Sales to assist).  Reorder should also be monitoring products that are reaching their best before date and taking appropriate action.  

Communication
Good communication channels between the warehouse and Reorder team should be in place, so that if anything unusual is happening (impacting the supply chain), Reorder will let the warehouse know and vice versa. 

Everyone needs to pull together to achieve great customer service and these are just some ways that Reorder can help the warehouse achieve this.

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