Introduction

The Daily Inventory Replenishment Report is designed for businesses that require quick and responsive inventory management. It focuses on a 14-day historical sales period, accounting for short vendor lead times and minimal safety stock days.

Key Features of the Report

• Short-Term Focus: Concentrates on recent sales data (14-day period) for accurate, up-to-date inventory insights.
• Quick Vendor Lead Times: Optimized for vendors with lead times of less than 7 days.
• Minimal Safety Stock: Safety stock days set at 1 day to maintain a lean inventory.

Key Metrics and Report Columns

• Product/Variant/SKU: Identifies each specific product and its variants.
• Vendor: The supplier of the product.
• Vendor Lead Time: The time taken by the vendor to deliver the product, typically less than 7 days in this scenario.
• Safety Stock Days: Indicates the minimal safety stock level, set at 1 day.
• Units Sold in Historical Period: The total number of units sold over the last 14 days.
• Average Units Sold per Day: The daily sales average, derived from the 14-day historical period.
• Quantity On-hand: Current inventory level of each product.
• Incoming Inventory: Inventory that has been ordered but not yet received.
• Days of Inventory Remaining: An estimate of how many days the current stock will last.
• Reorder Point: The stock level at which a new order should be placed.
• Reorder Quantity: The suggested amount to reorder based on sales velocity and stock levels.

Formulas for Reorder Point and Reorder Quantity

• Reorder Point: Calculated as [Average Units Sold per day] x ([Vendor Lead Time] + [Safety Stock Days]). This is the inventory level at which you should trigger a new order.
• Reorder Quantity: When the 'Quantity On-hand' falls below the Reorder Point, the reorder quantity is equal to the Reorder Point. If the on-hand quantity is higher than the Reorder Point, no replenishment is suggested.

Utilizing the Report for Daily Replenishment

• Inventory Analysis: Daily review of products nearing the reorder point, especially those with low days of inventory remaining.
• Replenishment Planning: Use average sales and current stock levels to determine immediate replenishment needs.
• Vendor Coordination: Fast-track communication with vendors for products requiring urgent replenishment, leveraging the short lead times.
• Safety Stock Adjustments: Monitor and adjust safety stock levels based on sales trends and variability.

Actionable Insights

• Prioritize Urgent Reorders: Focus on products with the lowest days of inventory remaining and those below the reorder point.
• Adjust Ordering Frequency: For products with high sales velocity or consistent low-stock alerts, consider increasing order frequency.
• Review Vendor Performance: Ensure vendors are meeting lead time expectations to maintain the efficiency of the replenishment cycle.

Updated on: 12/12/2023