Inventory Replenishment

Inventory replenishment is one of the most significant and challenging tasks in any ecommerce operation. Without a proper plan and infrastructure in place, you risk overselling, and upsetting customers, losing the sale and possibly the customer and any future sales.

Playing it safe by overstocking and accumulating dead inventory isn’t ideal either. These items are subject to obsolescence and damage, and they also eat up warehouse space and your staff’s time. Inventory and warehouse management can be extremely costly if poorly executed. Effective inventory replenishment is key to having optimal stock levels, profitability and satisfied customers who will give you return business.

Benefits of Automating Inventory Replenishment

A retail ERP solution like Jazva can do most of the heavy lifting when it comes to inventory replenishment. Jazva supports multiple methods of reordering automation.

If you want more control over the process, you can create POs manually and send them to your vendors directly from the system. But if you want to get the most of Jazva’s robust functionalities, the replenishment process can be fully automated to be based on calculated projections and intelligent forecasting.

Many companies are slow to adopt automation, and even sellers hesitate trying new technology. Traditional retailers especially fear software miscalculation, ordering too much and accruing various costs. While these scenarios are possible, they can easily be eliminated with good data and strategic planning, backed by an intelligent forecasting system.

Reorder Points and Reorder Quantity in Jazva

The simplest way to automate your replenishment process is to start with reorder points.
Reorder point is the minimum level of stock needed in your inventory management system before a purchase order is triggered. You can identify your ideal reorder point and reorder quantity by analyzing average sales over a specific time period. These calculations are available from the Stock Status page.

By designating a reorder point, Jazva will alert you to place a purchase order when your product’s inventory quantity falls below the reorder point. If you want further automation, you can enable Jazva to send the purchase order to your vendor automatically, and it will factor in your vendor’s lead time.

To illustrate, let’s say you’re an auto parts retailer, and you determine that on average, steel bumpers sell 60 units on eBay and 40 units on Amazon per month. If your vendor’s lead time is about a month, you can set a reorder point of 100. That way, when inventory falls below 100 at the end of the monthly inventory cycle, Jazva will automatically place a purchase order and send it to your vendor. This ensures you have enough inventory every month.

If you want to be more strategic and specific, you can set a minimum reorder quantity in Jazva. While the reorder point specifies “when” or “at what threshold” to reorder, the minimum reorder quantity tells Jazva “how much to reorder.” Doing so will ensure you have a precise amount of inventory at all times.

Pack size is another factor Jazva takes into account when reordering from multiple suppliers, since each vendor might have a different minimum order quantity (MOQ). For example, if you wanted to order 20 units from a vendor, but the vendor only sells in bundles of 30, Jazva will round up the purchase order line item accordingly and keep your inventory management system updated.

By setting manual reorder points, you can set hard rules and limits on your purchasing decisions. The downside to this method, however, is not factoring seasonality or trends within each channel or marketplace. Doing manual planning and analysis then setting an arbitrary reorder point can get cumbersome when you sell tons of SKUs across multiple marketplaces.

And that’s where Jazva’s intelligent projection engine comes in.

Use Jazva’s Calculated Projections for Accurate Replenishment Forecasts

By default, all reorder points for products are set to “Auto” in Jazva. This allows Jazva to use its own projections engine to dynamically calculate the proper reorder points for each item, down to each variation.

Jazva recalculates the sales projections for each active item in the system daily, based on the order history available for the item and similar products. Current projections for each product can be reviewed in the Statistics tab for each product. You’ll be able to see the projections for each channel and each product variation in the context of 3 months, 4-6 months, and 7-12 months.

The Statistics tab also gives you a myriad of information, such as the product’s activity log, sales history, receiving history and additional details such as previously missing or damaged stock.

Jazva considers a number of factors when forecasting product demand, including seasonality, average daily usage, and all available order history across your channels.

For example, let’s say you’re a toy retailer selling on 4 channels: Amazon, eBay, Walmart, and a webstore powered by Shopify. You walk into your warehouse and see half of your inventory is moving fast, while the rest is slow. You might think that you have enough products in stock, but by selling on 4 channels, it’s actually hard to know how much to reorder. When the holiday season comes, will you overstock or understock?

Fully Automating Your Replenishment Process

At Jazva, we take the complexity and guesswork out of inventory replenishment, so you can focus on what matters most: growing your business and improving the customer experience. We want you to achieve optimum stock levels so you don’t waste any resources, whether that’s inventory cost, labor or warehouse space.

Jazva offers a wide range of settings you can configure to ensure automated reordering precision, from lead time and days of safety stock to reorder frequency limits. Or, you can entrust Jazva’s powerful forecasting capabilities and let everything run in the background. It’s your choice.

But don’t wait. If you’re still not using Jazva to its full capacity, you’re probably spending unnecessary storage costs, along with the risk of stocks perishing, getting damaged or stolen. Once you’re accustomed to Jazva’s reordering capabilities, you can start automating the entire replenishment process based on rules you’re comfortable with.

If you’re in the market for a robust inventory replenishment solution, schedule a demo today and learn how intelligent automation can improve your business!

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Albert Ong

Albert Ong is the product marketing specialist at Jazva, a cloud-based multi-channel ecommerce solution that helps merchants fast track their online business. Jazva delivers a suite of enterprise functionalities that high volume B2B and B2C retailers need to compete and succeed in the market.

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