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Replenishment – Necessary Evil?

The process of replenishing a forward-picking location is a topic many distribution center managers love to hate. We considered it a necessary evil to the picking process. While replenishment does not directly relate to fulfilling orders, it is a vital function. Proper management of replenishment tasks can significantly impact your operations, unlocking the potential to improve overall productivity and simplify daily execution.

The traditional approach to the replenishment work queue moves from one extreme to the other:

  • Dedicate too many resources to replenishing and work in other areas falls behind.
  • Fail to complete replenishment tasks and picking is critically disrupted by stock-out conditions.

As with most topics, the right answer is somewhere in the middle. A properly conceived and configured Warehouse Management System (WMS) can facilitate finding the correct balance. While a comprehensive approach to the replenishment function involves many facets, below are a few essential elements:

  1. Prioritization

Replenishments are not all created equally. If your current WMS does not prescribe a triage approach to task prioritization, you have a tremendous opportunity. There are several methods, but the best practice is establishing rules and conditions that will yield three priority levels:  low, regular, and high.

For example, replenishments created by the normal trigger point (e.g., on-hand level at or below 50% of capacity) should be a regular-priority replenishment. Items with pending pick transactions that exceed the current on-hand of the pick location should be a high-priority replenishment. Replenishments scheduled to top-off a pick location would represent low-priority tasks.

  1. Escalation

The inventory within your facility is ever-changing (receiving inbound orders, fulfilling outbound orders). Prioritizing your replenishment work queue should be as dynamic. A replenishment created as a regular-priority may need to be automatically escalated to a high-priority.

Depending on your put-away rules and stock rotation logic, a pending replenishment may be demoted in priority (or even canceled entirely) if a new receipt is put away directly to the pick location.

  1. Accessibility

Every replenishment task is essentially a paired set of tasks:

  • A pick (from the source location) and
  • A put-away (to the destination location)

Consider how you will access the replenishment tasks – by zone of the source or destination. I would recommend organizing replenishments based on the destination zone. This helps facilitate a teammate’s sense of ownership and control for a pick zone. If you carefully craft your put-away strategy (see my prior blog), the reserve storage locations will be in harmony with your replenishment and pick methodology.

  1. Adaptability

When a replenishment is created, it is relative to the inventory level in the pick location at that time. However, at the moment replenishment is executed, the inventory level in the pick location may lower. If the destination location now has more room, and the source location has additional inventory available, the WMS should dynamically increase the quantity to be replenished accordingly.

Besides the techniques above, which will help better manage the current replenishment work queue, analysis of historical replenishment transactions is an often-overlooked perspective to improve slotting. Within a cohort of items (e.g., velocity-B items in zone-X in the past quarter), pick locations that were replenished most often may reveal an opportunity to re-slot that item in a larger location. A location with more capacity will be less likely to interrupt picking (reducing order fulfillment cycle time), and replenishment would be required less frequently (increasing productivity). Conversely, locations with pick activity but very limited (or no) replenishment transactions can indicate an item occupying a location that is too large. Re-slotting that item to a more right-sized pick location could reduce travel distance and improve pick density.

I hope to have convinced you that the typically unloved task of replenishment deserves attention. A comprehensive approach supported by a robust WMS can unlock efficiencies in the most unlikely corners of your operation.

— Kail W. Plankey, St. Onge Company

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