7 Ways to Minimize Inventory Obsolescence and Get a Proper Inventory Turnover during Replenishment

Replenishment is the physical act of moving product from a bulk or storage location to a pick location where product is selected for shipment to a customer. Some call this process a forward pick or letdown and it usually involves breaking down a pallet into the selling unit of measurement such as cases or eaches as part of the re-stocking function.

The replenishment function is critical to getting proper inventory turnover. How and when you replenish will have a direct bearing on the quality of those turns and keep inventory obsolescence to a minimum. Here are some best practices to consider.

1.     Advance Replenishment
Triggers for replenishment of pick locations are typically based on minimum-maximum quantities in a location. Adding the day’s order flow to your replenishment quantity allows you to do advance replenishment. If the day’s picks exceed available spaces in the pick locations, where possible, a temporary pick face will be created at the end of an aisle. Always aim to have enough stock on the floor to support that day’s picking activity. 

2.     FIFO Replenishment
Have your material handlers pull stock from bulk locations that contain the oldest stock. This is often easier said than done as it requires some sort of pallet identifier like license plating, lot number, or even an arrival date in order to differentiate which pallets to select for replenishment. If you’re like many warehouses that use double deep storage racking, which is only accessible from the front, you’re going to use a modified form of FIFO replenishment for the sake of efficiency. 

3.     Directed Putaway
When stock in the pick faces are low or empty, your putaway logic should support receiving to pick location replenishment. This may include the capability to break down pallets in the receiving area into units of measurement acceptable for the pick locations. 

4.     Prioritize Replenishment
Ensure pick faces that need to stock up in support of the day’s picking activities are prioritized ahead of min-max or what can fit into a pick face. Constantly monitor picking backlogs and add additional manpower as needed if replenishment is falling behind.

5.     Multi-Task the Replenisher
Have the person doing replenishment perform cycle counts when a location is zero or near zero. Make that person responsible for ensuring stock is properly arranged, location labels are visible or present, damaged stock is replaced, and inventory is neatly arranged, making sure it is easy to pick.

6.     Replenish Directly to a Staging Location
If a picker can’t find what he needs, don’t make him circle back to the warehouse; instead, send the replenisher directly to the pallet in the staging area. One of our customers designated a person to this function and nicknamed him ‘Shorty’; his job is to fill all orders just by drawing stock from other locations in the warehouse.  

7.     Replenish by Zone
As with picking, over 50% of replenishment activity is spent in transit, moving from location to location. Economize that movement by organizing replenishment by zones or groups of locations in the warehouse.

In summary, replenishment is a balancing act; too much replenish activity means wasting resources, while too little causes fill rates to suffer. You know you’ve achieved the right balance when you’ve scheduled just enough replenishment activity to support that day’s picking.

Jeff Lem