Autoorder and Daily Solutions
To ensure the product availability with no surplus of inventory – each level of the supply chain should monitor the inventory status for each product. Though, with the current variety of products, it is almost impossible to pay attention to each product at each point of the supply chain (SKU). To track and monitor the inventory level of each SKU in the system, we use the Dynamic Buffer Management (DBM).
Daily before generating orders, the system uses the DBM algorithms to check the consistency of the target inventory level (buffer) to the current product balance and current product demand. If the product is abundant or insufficient, the system dynamically recalculates the buffer size and orders the product based on the new value.
Since the buffer consists of three zones: red, yellow and green, the remaining product might be located in one of the zones. When optimizing orders, the priority system is considered – products, the remains of which are located in the red zone, have a higher priority than the products, the remains of which are located in the yellow zone. Yellow has a higher priority than green.
During the phase of product connection to the inventory management system, there is a mechanism that allows you to calculate the buffer based on the sales history for each product at each storage point. After several cycles of replenishment, the system will adjust buffers in accordance with the actual consumption of the product.
As a result of the DBM operation, the system independently manages each SKU to ensure the permanent product availability without creating the surplus in the network