Warehouse Replenishment

What is Warehouse Replenishment?

Warehouse replenishment is the process of restocking inventory from reserve storage locations to picking shelves. This ensures that products are readily available for order fulfilment, maintaining an efficient flow of goods within the warehouse. Proper replenishment involves strategically moving items to optimise storage and minimise downtime, ultimately enhancing the overall operational efficiency of the warehouse.

Table of Contents:

• Restocking Activity
• Replenishment Timing
• Warehouse Management Systems (WMS)
• Why is Warehouse Replenishment Important?
• Warehouse Replenishment Best Practices
• Summary

Pick face replenishment is an essential warehouse function.  It is designed to move items from reserve storage locations to picking shelves.  When properly executed, this process ensures that each picking location is sufficiently stocked.  This allows for the item in demand to be retrieved and packed as soon as an order arrives to the fulfilment centre.

Many of us have experienced leaving a retail store, when the product we sought could not be found.  Aside from the feeling of dissatisfaction, this typically resulted in a lost sale and ultimately, a loss in profit for the retailer.  In warehouse operations, this is analogous to having an empty picking slot.  This is a particularly sensitive issue in eCommerce retail for instance, where poorly-managed replenishment can impact an online brand’s ability to fulfil orders.

For efficient and smooth order picking, the replenishment method should match the warehouse workflow and operational rhythm.  In all cases, pick faces should have the capacity to stock the optimal product quantity based on the expected demand and pick velocity.  Also, for optimal storage density, remember not to overfill locations and de-layer pallets in order to match the anticipated pick activity on the day.

Restocking activity

Broadly speaking, restocking activity can be classified into three basic options.  In our experience, we often find that warehouses operate using combinations of these;

1. Wave replenishment

Products that are required on the day (wave) are moved directly to the pick face.  This is favourable for warehouses that have limited pick faces or slow-moving SKUs.

2. Top-Up replenishment

This is beneficial to fast-moving SKUs, where each location is scheduled to be filled to capacity during down time.  Typically, this will occur during breaks or after picking has been completed for the day.

3. Forward replenishment

For warehouses having access to accurate demand forecasts, the stock required for several weeks in advance can be located to designated picking locations.

The decision to use a particular method or mix of methods is usually driven either by;

• physical restrictions (the number of pick locations available, etc.) or
• by business requirements (FIFO and LIFO requirements, unexpected demand surges, etc.).

Most of you will agree that pick locations are considered precious spaces.  Any knowledge of product activity profiles, therefore, is of great value to the warehouse manager.  Activity profiles help maintain replenishment equilibrium and ensure that the exact stock required to fulfil an order is located in the right place.  An efficient replenishment policy can also support strict stock rotation by ensuring newly-received and aged stock, of the same product, are not mixed in a customer order.

Replenishment timing

There are times where it is not feasible for picking and replenishment activities to be scheduled at different times during the day.  In these cases, pickers and forklift trucks must share the same aisles simultaneously.  To alleviate safety concerns (e.g. pedestrian blocking, etc.), multiple pick faces may be allocated to the same SKU.  Alternatively, replenishment may be performed from a separate aisle using flow racking, for example.

Where possible, it is good practice to move stock directly from receiving to the pick face (without overflowing).  This will help to reduce the process cycle time and associated costs.  Many warehouse managers successfully accomplish this by coordinating inbound delivery schedules.

In many instances, the expected run rate of a product can be predicted to acceptable levels.  This can permit restocking to be triggered when the inventory on-hand reaches a threshold level in the pick face location.
Understanding the expected SKU velocity is also of interest.  Not only does it help the warehouse manager allocate the proper amount of storage space for that item, but it also allows for that particular product to be slotted in a location for a longer period of time.

For high-running items and where space permits, it is often convenient to accommodate full pallets of stock in bulk locations.  These may be above or adjacent to the pick faces.  This allows for a steady flow of stock to be maintained by the replenishment process

Warehouse Management Systems (WMS)

Warehouse Management Systems can be configured to trigger replenishment activity when a SKU reaches a prescribed minimum threshold.  This allows the pick face to be replenished before the next wave of orders are released to the warehouse.  The timing of replenishment is important and these time-sensitive triggers help prevent early or late replenishments.

Early replenishment happens when restocking occurs before the pick lists have been generated.  For example, an early instruction to top-up can lead to overfilled pick faces and result in FIFO non-compliance.  On the other hand, late replenishment is possible when staff pick out of sequence and deplete the pick faces before the replenishment team restock the locations.

Available technologies, such as barcode scanners and RFID, integrated with the WMS, will allow the wireless transfer of information in real time.  This should only improve the replenishment process further and help to minimise data error rates.

In situations where a WMS is unavailable, warehouse staff must be constantly aware of the anticipated short-term demand so they can manually identify and assess the replenishment quantities.  Of course, this places an increasing emphasis on pick face design to ensure there is adequate replenishment capacity based on the expected picks.

Rapid order fulfilment today requires a constant need for well-timed replenishment.  This will prevent order shortages and positively influence pick cycle times and service levels.  As you can see, this can be enabled using real-time data, basic analysis and available technology.

Why is Warehouse Replenishment Important?

1. Prevent Stockouts

Regular replenishment ensures that high-demand products are always available, preventing stockouts, potential lost sales and loss in earnings. This is crucial for maintaining customer satisfaction and operational continuity.

2. Improve Order Fulfilment Efficiency

Keeping picking locations well-stocked streamlines the order fulfilment process. This reduces the time spent searching for items, thereby speeding up order processing and delivery times.

3. Enhance Inventory Accuracy

Consistent replenishment helps maintain accurate inventory records. This allows for timely detection and correction of discrepancies, ensuring reliable inventory data.

4. Optimise Storage Space

Efficient replenishment practices ensure optimal use of warehouse space. This avoids overstocking in picking locations and maintains a clutter-free, organised storage environment.

5. Better Demand Forecasting

Replenishment data provides insights into product movement and demand patterns. This information is valuable for refining demand forecasts and making informed inventory management decisions.

Warehouse Replenishment Best Practices

1. Implement Automated Replenishment Systems

Automated systems use real-time data and algorithms to determine optimal replenishment times and quantities, reducing manual intervention and errors.

2. Prioritise High-Demand Items

Focus on regularly replenishing high-demand products to ensure they are always available. This can be achieved through priority schedules and close monitoring of inventory levels.

3. Use ABC Analysis

Categorise inventory based on importance and usage rates. By prioritising Category A items, warehouses ensure that critical products are consistently in stock, optimising resources for lower-priority items.

4. Maintain Clear Communication Channels

Establish clear communication protocols between warehouse staff and management to ensure everyone is aware of inventory needs and priorities, facilitating smooth replenishment operations.

5. Conduct Regular Audits

Perform regular audits of inventory and replenishment processes to identify inefficiencies and areas for improvement. This helps align replenishment practices with overall warehouse management goals.

In Summary

Effective warehouse replenishment is essential for maintaining seamless operations, preventing stockouts, and enhancing order fulfilment efficiency. By implementing best practices such as automated systems, prioritising high-demand items, using ABC analysis, maintaining clear communication, and conducting regular audits, warehouses can optimise replenishment processes. This will not only improve operational efficiency but also support better demand forecasting as well as customer satisfaction. As the logistics landscape evolves, leveraging advanced technologies and strategic replenishment practices will ensure that warehouses remain agile and capable of meeting the dynamic demands of modern commerce.