Replenishment

Pull It Scan It Capture It Send It Customer’s System Analyze Customer’s Needs Trigger Reorder Point Pull It Scan It Capture It Send It Ship It Distributor’s System Suppliers

Planner’s Replenishment Flow Chart Sales History Mathematical Forecasting ReorderLine Buy Decision Inventory Purchase Forecast Error Metric Goal: Minimize Safety Stock Sales, Marketing and Operations Goal: Improve Customer Service Combination Forecasting Collaborative Forecasting Goal: Accommodate Changing Customer Needs Goal: Automate Purchasing Goal: Minimize Landed Cost Planner’s Replenishment Flow Chart Sales History Mathematical Forecasting Reorder Point Line Buy Decision Goal: Minimize Purchase Forecast Error Metric Goal: Minimize Safety Stock Sales, Marketing and Operations Input Goal: Improve Customer Service Customer Input Combination Forecasting Collaborative Forecasting Goal: Accommodate Needs Goal: Automate Purchasing Goal: Minimize Landed Cost Goal: Minimize Inventory, Minimize Holding Cost, Minimize Procurement Cost, Maximize Fill Rates

Actual Sales Data Extract

Actual DemandData Extract Sales Months

ActualForecastMAD January February March April May June July August September October November December

ActualForecastBias January February March April May June July August September October November December

Actual Demand Forecasted Demand Bias

ERP System Mathematical Modeling Planner Data Cleanup and Corrections Combination Forecasting Collaborative Forecasting Error Metrics Used as a Screen to the Next Level Decreasing Numbers of Items Forecasted

Supplier 4: High Average LT Low Variability Supplier 1: Low Average LT High Variability

Max Min Max Time To Reorder Min

Demand During Lead- Time Inventory Demand During Lead- Time Inventory Demand During Lead- Time Inventory Safety Stock Safety Stock Safety Stock Fill Rate Increases

Coordinated Replenishment

Distributors Chain Retailers Independent Retailers Finished Goods Warehouse Local Manufacturing Outsourced Manufacturing China/Pakistan LT days Haiti/Dominican Republic LT 3 wks to 150 days Houston/Victoria LT days Raw Materials Suppliers Raw Materials Suppliers Raw Materials Suppliers Raw Materials Suppliers Many Sources EDI and Fax Orders