Replenishment
Definition
The process of restocking inventory to meet ongoing demand, whether by purchasing from suppliers, transferring between locations, or triggering production. It is the execution engine that keeps stock policies real.
In Practice
Replenishment converts inventory policy into orders. Whatever the trigger, a reorder point breach, a periodic review date, or a min-max signal, the replenishment process generates the purchase order, transfer order, or production order, sizes it against constraints, and tracks it to receipt. In multi-tier networks, replenishment includes store-level restocking from DCs and DC restocking from plants.
Day to day, planners spend more time managing replenishment exceptions than creating orders: expediting late POs, reacting to demand spikes that outrun open orders, and reallocating scarce inbound stock. Good replenishment design minimizes those exceptions by keeping parameters current and lead times honest.
Example: a pharmacy chain replenishes 900 stores nightly. The system compares each store SKU's inventory position to its target, nets off in-transit totes, and builds pick waves at the DC, so a store selling out of allergy medicine on a windy spring day is restocked before opening two days later.
Related Calculators
Related Terms
The inventory level that triggers a replenishment order. It equals expected demand during supplier lead time plus safety stock.
Reorder QuantityThe number of units ordered when a replenishment is triggered. It may be a fixed lot size such as the EOQ, or a variable amount calculated to reach a target stock level.
Min-Max PlanningA simple replenishment method where an order is triggered when inventory falls to a minimum level and stock is replenished up to a maximum level. The min acts as the reorder point and the max caps the order-up-to quantity.
Inventory PositionThe total stock available to meet future demand, calculated as on-hand inventory plus on-order inventory minus backorders and committed allocations. It is the number replenishment decisions should be based on.