INTRODUCTION TO AUTO REPLENISHMENT SOLUTIONS
Timely and adequate auto replenishment is one of the most important elements of an effective inventory management system in retail. Insufficient product availability on the shelves will certainly affect sales. However, excess inventory levels can lead to overstocks, write-offs, dead stocks, and reduced turnover. These often result from so-called “human error,” the mistakes managers or suppliers make and invariably lead to lost profit. That is why, in recent years, more and more retailers have preferred to automate the replenishment process using artificial intelligence.
An automated replenishment system is a comprehensive feature that provides the complete process for ordering goods to a retail outlet or a distribution center without manual intervention.
Implementation of high-quality auto-order software will invariably lead to a number of positive results:
- increased sales;
- improved turnover;
- reduced staff costs;
- increased % of goods availability;
- reduced excess stock / over stock.
When choosing an auto-replenishment solution, a retailer should pay attention to the following features of the system:
- Prompt response to changes in demand. The system should instantly respond to the demand change dynamics and adjust the parameters for automatic order while excluding atypical fluctuations from the calculations.
- Significant reduction in labor costs. The qualitative system automates up to 90% of all operations, even with an ever-increasing number of orders, allowing the management team to focus on more strategic tasks.
- Convenient and informative interface. Diving into the complex logic of inventory management processes, many companies cannot translate this into a form that is understandable and convenient for the client. The winners are those systems that are able to offer the most “user-friendly” solution for quick tracking of the indicators and responding to the current situation.
- Control and reporting. A qualitative system helps not only analyze all the necessary inventory management metrics but also notifies you in time about upcoming problems.
- Implementation timeline. Depending on the content, technical features, or other factors, different systems may have different implementation and integration periods: from several months to two years or more.
- Successful product implementation cases. Analyzing all of the above factors, it’s important to pay attention to the real experience of similar companies that have already implemented this product. Analysis of feedback and reviews, experience exchange with colleagues on the market, and communication with provider representatives will be useful sources of information for making the final decision.
So, we bring to your attention an overview of the seven most popular cloud solutions in 2023 with the function of automated replenishment in retail.
LEAFIO AI Retail Platform
LEAFIO Inventory Optimization is the true autopilot solution for inventory management in retail, with automated replenishment as one of its core features. The LEAFIO Platform provides a complete ordering process at all levels of the supply chain without manual intervention. This cloud SaaS solution is equipped with a forecasting module (demand forecasting) and considers atypical and seasonal fluctuations of demand.
By using unique algorithms, the system successfully manages various categories of goods, including fresh and ultra-fresh, and also considers the specifics of goods supply for multi-level replenishment and stock optimization. Operational and strategic dashboards are the functional tools for the manager's daily work, and the powerful BI module with more than 40 analytical reports will point a retailer to the bottlenecks in inventory management.
LEAFIO has more than ten years of experience implementing cloud solutions for more than 160 retailers, distributors, and wholesalers around the world.
The unique feature of LEAFIO is its culture of interaction with clients, namely:
- The company demonstrates a flexible approach at all stages of interaction: from the sales approach, implementation, and subsequent product consulting to setting up additional options for the needs of a particular business.
- The implementation team is directly committed to financial results for the client from the product implementation.
- Conducting quarterly meetings with the customers after product implementation not only provides ongoing support and assistance in solving the customer's current problems but also familiarizes them with quarterly updates.
- When the client invests in this product, they don’t just acquire high-quality software; they gain a long-term consulting partnership. Developers are interested in long-term support and financial results for clients with a monthly subscription.
The LEAFIO Inventory Optimization solution covers all the necessary components of the inventory management process, leaving no “white spots” in the retail business process. The implementation of this solution takes about 6 months. Unlike the bulky and clumsy systems built in previous decades, the LEAFIO solution is incredibly flexible and immediately gives a visible economic forecast, which is enthusiastically noted by the users who have switched to this software from other similar solutions.
With a highly intelligent process logic “under the hood”, the system interface is convenient and intuitive. The LEAFIO Inventory Optimization cloud solution is suitable for retail businesses of any size and an unlimited number of users. The price of the product depends on the number of warehouses, stores, and the size of the assortment of a particular retailer and is a good value for its wide functionality, which sets it apart from similar solutions on the market.
RELEX Solutions is a provider of cloud-based software for retail, wholesale and manufacturing companies.
The Relex cloud platform is an automated replenishment and distribution solution based on AI and ML algorithms. The system helps retailers optimize replenishment and distribution tasks for a variety of product categories, from non-food to fresh and seasonal products.
RELEX's auto-replenishment solution allows:
- Automatically place orders each day using machine learning-based forecasting that takes into account the impact of many factors.
- Optimize inventory levels to ensure shelf availability and inventory turnover while reducing operating costs and maintaining replenishment right on the shelf.
- Fill gaps in seasonal planning by enabling integration of pre-season ordering, initial allocation, auto-replenishment during the season, and targeted allocation and markdown.
- Use initial allocation and attribute-based forecasting of new items to improve replenishment accuracy and reduce the number of items that will be taken out of production.
In general, users are positive about RELEX’s cloud solution, noting a user-friendly interface and possibilities of configuring necessary analytics (capterra.com). However, some reviews say that the program interface is difficult to use on small monitors and mobile devices. The platform provides accurate forecasts for products with a year or more of sales history but forecasts for new products are often inaccurate. (trustradius.com) The system is designed for both large and small companies. Although, the time-consuming learning curve and implementation cost (according to reviews) make it more suitable for large corporations.
The Blue Yonder Inventory Planning and Management module also provides opportunities for efficient and timely auto replenishment of stocks. This tool has algorithms to generate replenishment plans automatically based on key metrics, including sales history, on-hand stock, safety stock requirements and customer orders.
Blue Yonder(formerly known as JDA Software) has been on the market since 1985. The Luminate platform from Blue Yonder is a comprehensive offering for goods forecasting and replenishment in retail.
A number of the system’s features ensure the efficient execution of the replenishment function:
- Order planning accuracy is ensured through dynamic master planning, root cause analysis and “what if” probabilistic analysis.
- The dynamic segmentation module creates a chain of operations to meet specific customer requirements by automatically clustering them by product, location, and specific purchasing requirements.
- The platform also assists vendor planners in delivering differentiated levels of service based on customer value and business parameters.
In general, the users respond positively to the platform, noting the flexibility of customizing and building libraries to get started. Even managers with little experience can learn programming with step-by-step help and tutorials. However, such mentoring can come at a rather high cost. The timespan of software implementation can vary from 1 to 2 years or more. Despite the fact that the platform is designed for both small and large businesses, due to its cost and the complexity of the initial familiarization, the product is more accessible to enterprise corporations. (capterra.com)
The Logility Platform is also equipped with the dynamic allocation algorithm to provide standard auto-replenishment system functionality. This means that retailers that operate with several multi-distribution centers can automatically distribute and restock each store or channel from any combination of distribution centers to increase inventory speed and maintain each location's ability to meet financial targets.
Founded in 1996, Logility is a subsidiary of American Software. The Logility Platform is the cloud solution for multi-stage inventory optimization (MEIO), designed to control an increase in stock at all stages and points in the supply chain.
This system allows you to:
- Rate the distribution network and prioritize replenishment channels based on business rules. This is relevant when a product is not available from a predetermined source and the outlet must either wait for the distribution center to restock or manually intervene in analytics to speed up the process.
- Automatically rebalance and prioritize the distribution of goods to the right stores and warehouses without the need for manual intervention, which allows you to avoid shortages at some outlets and surpluses at others.
Although you can find a lot of positive feedback on softwareadvice.com about Logility, for example, about the ease of use of the system and the high service level of the staff, some users still noted a number of shortcomings. They include a relatively long period of implementation of the system and difficulties in integrating with some databases. In some cases, the implementation took a little less than a year, in others - up to two years.
However, it is noted that the optimal number of users for the system is from 2 to 500, which makes it an acceptable solution for both small and large companies.
The company was registered in 1995. The Kinaxis RapidResponse cloud solution, delivered as a set of customizable applications, is a solution that helps large enterprises plan at all levels of the supply chain. The Kinaxis inventory replenishment software also has a number of useful features that increases the accuracy of orders for auto-replenishment:
- The ability to configure policy settings for auto-order. If necessary, the manager can adjust the configuration of existing settings.
- Generation of recommendations on the safety stock, which includes stock monitoring and the ability to select the optimal parameters from those proposed for the formation of an auto order.
- The ability to experiment and simulate scenarios of various unforeseen situations with suppliers, demand surges, critical levels of key indicators, etc., without the risk of lost profit.
RapidResponse from Kinaxis is not only a mobile tool for auto replenishment but also a simulator for modeling and building efficient supply chains, as noted by some capterra.com users.
However, a significant number of users noted some negative aspects of the product, like the periodic occurrence of unforeseen errors in the application, as well as difficulties in integrating with other systems, including the high cost of both the product itself and the accompanying user training (softwareadvice.com).
The software is recommended for medium and large companies with 1000+ users.
Founded in 2005, Solvoyo offers a cloud-based end-to-end planning and analytics platform powered by machine learning. Like previous software solutions, the Solvoyo Suit has all the basic elements of an auto-replenishment system. The developers also highlight a number of features of their product:
- Real-time response. The cloud engine detects significant changes in demand, supply, and lead times, and user-friendly dashboards provide instant visibility of the issues.
- Machine learning and advanced analytics: Forecasts, safety stocks, and replenishment recommendations automatically adjust to changing demand and operational constraints so the purchasing team can focus on strategy development.
- The platform provides a digital twin for the entire supply chain and supports “what-if” analysis to evaluate different supplier options, manufacturing sites, or delivery schedules.
- The system automates auto-order decisions by providing prescriptive actions such as replenishment plans, production schedules, and pricing actions in response to the current conditions.
Solvoyo’s platform is designed for both retailers and manufacturers and wholesale distributors. In general, the users positively evaluate the analytical unit and the clear interface of the system with a sufficient number of dashboards. Among the shortcomings, it is often noted that as the software solution for end-to-end planning, the Solvoyo Suite does not have the tools for checking and managing stock reserves. In addition, some users did not rate the price-quality ratio of the product high enough (4 out of 5 on capterra.com). The system is designed for a number of users from 1 to 1000+, which makes it a suitable solution for companies of different sizes.
o9 Solutions is an AI-powered cloud platform for the digital transformation of retail planning. The o9 replenishment solution offers multi-stage optimization of service costs, inventory levels and service level tradeoffs over traditional replenishment approaches in a multi-channel environment.
The auto-replenishment system from o9 Solutions allows purchasing managers to:
- Build a replenishment workflow by managing exceptions;
- Receive prompts and actionable recommendations based on AI;
- Simulate a multi-stage network from supplier to shelf;
- Optimize inventory across the entire chain and on a per-store basis;
- Optimize inventory based on constraints for seasonal or promotional peaks;
- Obtain accurate order forecasts for suppliers;
- Manage centralized supply chain constraint data;
- Conduct procurement planning using "what-if" scenarios.
According to user reviews on G2.com the o9 solution allows you to fully automate the planning and replenishment process and move away from outdated Excel sheets. Users also note the ease of use and rather a user-friendly interface of the system. It is noted, however, that the software provides sufficient forecasting accuracy and inventory optimization only when properly implemented and managed. The downside is that integrating the system with existing data sources is very difficult. It needs a really experienced system implementer to make sure that all the data is correctly and accurately entered into the system o9. If this is not done correctly, the planning result will be inaccurate. Also, according to some reviews, the knowledge management of o9 solutions is not in-depth compared to other software.
Most cloud-based forecasting and auto replenishment solutions can provide all of the core features, but the breadth and depth of these features can vary. Important selection factors are an acceptable price-quality ratio for the business, the timing of product implementation, as well as the possibility of after-sales support from the provider and the regular release of updates. It is important for a retailer to choose a system that will be most suitable for the company or easily adapt to the specifics of the business without excessive costs. In addition, it is important to consider the possibilities for scaling the system, as well as its integration with programs and resources that already exist in the company. Rather than the company adapting to the replenishment system, the system should fit the company.
An auto replenishment system is integrated inventory management software that allows retailers to streamline the purchasing and replenishment processes. For example, based on the most accurate forecasts, LEAFIO’s system automatically creates and sends orders to suppliers, provides analytics on current inventory levels and highlights emerging problems.
The primary purpose of the auto replenishment system is to provide the inventory level required for sales with a minimum surplus in a timely manner. The software helps to reduce labor costs and level out errors in the purchasing process, optimize inventory, and increase the availability and turnover of goods.
The result of a replenishment system functioning is an optimal service level with minimal overstocks. Thus, the type of the system plays a secondary role. In the first place, here are the maximum possible demand factors the algorithms can take into account when building a forecast to ensure its maximum accuracy. For instance, LEAFIO algorithms can take into account seasonality, planned promotions, lead times, current stock, goods in transit, supplier schedules, etc.