How to optimize warehouse replenishment

4 January 2017 / by Chris Anton, Executive VP for Snapfulfil North America

In previous articles, we focused on the challenges facing warehouse personnel in the modern e-commerce market, specifically goods-in, put-away and returns. Perhaps the only remaining piece of the warehouse logistics puzzle is replenishment. With the help of a warehouse management system, this key step in the warehouse process can be accurately planned and optimized to ensure the most efficient allocation of resources possible.

Replenishment basics

Replenishment involves moving inventory from reserve status to primary storage so that it may be picked, packed and shipped. It can also be thought of as moving items from "upstream" in the warehouse process to "downstream" as they are slated for shipment.

This may seem like a no-brainer of a step, but it takes on massive importance when scaled to the size of the average warehouse. If the item can't be located quickly, or there is any error in finding or utilizing it, this small mistake can cause the entire workflow to break down. By optimizing replenishment, companies can cut down on these errors, save on costs and ultimately perform better. But to get to that point requires an optimized system.

Types of replenishment

There are three distinct methods for warehouse replenishment processes:

  • Demand-based: Inventory is only moved on an as-needed basis. This cuts down on wasted time but can require extensive planning, with plenty of room for uncertainty.
  • Routine: Replenishment is triggered only when a product reaches a minimum threshold at the point of picking. Routine-based replenishment can work well for seasonal products with predictable demand. However, it may require more space in both upstream storage and downstream picking areas.
  • Top-off: If activity in one pick line is temporarily slow, top-off replenishment could be put in place to take advantage of these fluctuations. This gives warehouse managers flexibility in shifting work around the warehouse to increase efficiency at peak times while taking advantage of demand troughs.

The ultimate goal of processes like replenishment is to ensure items reach their destination accurately and on time.

All three of these replenishment methods could be in use at the same time in the same warehouse. A facility supplying a grocery store chain, for example, likely deals with a broad mix of items that may be seasonal products, staple foods and meals that require special preparation and packaging. Each of these three replenishment styles may have to be used at the same time, perhaps even for the same product. Without a robust method for planning, tracking and executing these strategies, there's no telling how much productivity could be wasted.

Making it work

To add value to replenishment processes, warehouse operators need to focus on inventory management and demand planning. As Logistics Management noted, the required attention to detail is certainly made easier through the adoption of a smart WMS, but the addition of forecasting and strategizing around expected demand is what makes replenishment fully optimized.

With all of these systems running together, how can warehouse staff ensure their activities on the ground level are accurate for each and every order? The best solution is a well-implemented WMS with system-directed and scan-confirmed picking. This allows data on inventory levels and item destinations to be recorded in real time, and eliminates confusion when it comes to picking and packing for shipment. Using this methodology, replenishment processes also become more efficient as workers can more easily shift between lines to pick up slack if needed.