Retail Replenishment – How tuned in are you?

I spent about 9 hours yesterday analyzing sales, order, and forecast data for Wal-Mart, Home Depot, and Lowe’s vendors and I am somewhat surprised by my observations.  It’s pretty clear there are some min/max rules in place as I can see patters to the order quantities based on the OH inventory and the order case pack quantities.  However what surprises me is that I also see a large number of what I would guess are “manual overrides.” That is UPC/stores which clearly need inventory and fall under the minimum OH of other stores but which do not have open order, and UPC/stores that are clearly overstocked (e.g. high WOS) and yet have an open order.  It makes sense there would be automated replenishment rules in place and then some lead-way for the buyer/replenishment manager to make judgment calls so that leads me to my question….

What do you know about your key retail customers replenishment rules?

  • Simple min/max ordering?
  • Based on OTB dollars?
  • WOS trigger?
  • At what level is demand calculated?  e.g. Category/Region, Category/State, Sub-category/State
  • Under what situations will the buyer do a manual override?

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