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i2 Allocation and Replenishment Management
i2 Allocation and Replenishment Management
Allocation and Replenishment Management provides the rich set of capabilities required to tackle today’s challenges and provide a leading edge to retailers so they can better serve their customers and compete effectively.
Some of the key challenges faced by retailers today include:
- Stock-outs/lost sales for some items; excess inventories for others
- Case pack configurations that are not optimized with store needs
- Inventory plans that don’t consider demand and supply variability
- Lower inventory turns and customer-service levels
- Difficulty in managing ever-growing combinations of SKUs across stores
- Receipts-driven philosophy
- Limited promotions effectiveness
i2 Allocation and Replenishment Management (ARM) enables the creation of feasible and actionable plans that account for plan targets and constraints in a connected multi-level supply chain. Given that most fashion products go through a push (initial allocation)—pull (back-to-sales replenishment)—push (end-of-life or markdown) lifecycle, i2 ARM enables basics replenishment planning and fashion allocations in a single system. To ensure that the plans are executable, i2 ARM accounts for supply and capacity constraints to create feasible plans over time—every time. Also, the plans are created on a connected supply chain—from vendor to distribution center to store—in a single model.
Capabilities of i2 Allocation and Replenishment Management can include:
- Time-phased demand and replenishment plans that provide visibility into inventory investment and product flow over time, enabling effective collaboration within the organization and with vendors (connected model to support direct-store delivery, vendor-DC-store, vendor-XDock DC-store)
- Highly scalable, multi-period allocation and replenishment planning for both solids/eaches and case-packs/mix-packs
- Inventory analysis and optimization—segmentation of products, order policy/target service-level determination and “what-if” scenarios, calculation of optimal levels, multi-echelon strategy
- Simulation capabilities—based on financial investment, service level, and safety stock interplay
- Support for both hard supply chain constraints (such as item availability; shipping, receiving, and location calendars; effectivity dates; and pack multiples) as well as soft constraints (such as handling and storage capacity at distribution centers and stores, and vendor minimums), with a restricted subset available for interactive plan overrides
- Advanced techniques (in batch mode) for replenishing slow-moving SKUs, including calculating replenishment parameters based on average rate of sale, presentation stock, lead time, and review times
- Integrated planning for turn and promotional items (in batch mode) to ensure coordinated flow and adequate supply for promotions
- Multiple replenishment policies to cater to diverse product segments—reorder point/reorder quantity, reorder point/up-to level, reorder point-to-future target level, min/max, min on hand for different product segmentations
- Item linking and substitutions—one way, two way, phase out, multiple linking, sudden death, effective date
- End-of-season “must-ship” logic to push excess inventory
- Automated purchase order approval based on business rules
- Prioritization can be made on which orders, locations, or customers receive inventory first
- Robust exception-management framework with decision support for expedite candidates, increase supply, increase capacity, and potential stockouts
Benefits of i2 Allocation and Replenishment Management can include:
- Consistency in managing inventory levels holistically across the supply chain across multiple time periods
- Better in-stock positions resulting in higher customer service levels and better promotional effectiveness
- Reduced inventory levels with optimal inventory investments
- Increased inventory turns
- Reduced stock-outs and markdowns
- Efficiency in logistics and distribution costs by better planning around constraints involving storage, handling, container load building, and vendor capacity
- Overall business/productivity improvements due to managing by exceptions and rapid re-planning
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