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Replenishment managers are responsible for ensuring that items are replaced the moment they leave shelves—whether they have been purchased by an end customer or removed by a retail professional because of damage or age. At the heart of this effort is inventory management, as replenishment managers walk that very thin and precarious line between stockout and oversupply.
When replenishment managers arrive at their desks each morning, their first task is to check the sales and inventory data from the previous business day as well as any problems that might have arisen as a result of the previous business day’s transactions. Key issues discovered should be prioritized by time sensitivity and business impact in dollars. For example, is there a top-selling item that has low in stocks? If so, the company could be losing millions of dollars in sales because that item is missing from store shelves. Replenishment managers must identify the underlying cause of this imbalance—whether a supplier shortage, a replenishment software issue, a breakdown in the supply chain, or an inaccurate inventory count. Then, they have to find and implement a solution.
Once the business position is known (and any issues are resolved), then the replenishment process begins. Replenishment managers now embark on their number-one job: correcting and adjusting the forecast. The following are essential when working toward this goal.
Sometimes systems have glitches, and over-ordering happens. This is something that must be corrected right away. Upper management, suppliers, distribution centers, and all other stakeholders should be informed not to execute the order. Failing to order enough is also something replenishment managers must address quickly. Suppliers need to watch their orders daily and escalate any issues of missed orders to replenishment managers.
In addition, when a merchant decides to change the makeup of an item’s stock keeping unit (SKU), there will be a time of transition from the old items to the new ones. Usually the timing is set, and it is the duty of replenishment managers to work with the suppliers in order to ensure the new items are ready for the shelves. If suppliers run into delays, replenishment managers should escalate the issue to the merchant and upper management.
Replenishment managers play critical roles in their supply chains. Too many stockout and oversupply situations can have a detrimental effect on a business, so a successful replenishment manager is a critical company asset. Following these guidelines is a proven method for achieving the right inventory balance to meet customer demands.
Wambui N. Gathu has worked as a replenishment manager at Wal-Mart Stores and, more recently, Mars Chocolate North America. She currently is pursuing her APICS Certified Supply Chain Professional designation. Gathu may be contacted at firstname.lastname@example.org.
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