Analyze and achieve the most profitable inventory level.
4R DC Replenishment delivers you true multi-echelon reorderpoints for every SKU, at every distribution center, every week.
“4R allowed us to refocus our resources on not only just managing our inventory but improving our supply chain.”
—Vice President of Inventory and Transportation | The Vitamin Shoppe
Benefits at a Glance
True Multi-Echelon Replenishment:
Our DC reorderpoints leverage 4R profit-optimal store reorderpoints and current store inventory positions to determine the store orders that will be placed on the distribution center during the next vendor coverage period.
We take into account all sources of demand on the DC, including brick-and-mortar store, Internet, catalog, and wholesale channels. Rather than treat Internet sales as just another store, 4R’s Direct Reserve quantity is calculated to protect DC inventory from being drained by store orders.
Vendor Order Forecasts:
Our solution enables you to share long-range order forecasts with your vendors. This helps them plan better, resulting in higher fulfillment rates and shorter lead times for your DCs.
4R’s unique Software-as-a-Service “Plus” delivery model provides dedicated customer service experts as well as cloud-based software. You don’t have to purchase hardware or software, or get training; all you do is set up data exchanges. Our team performs Quality Assurance on our deliverables and consults with you on a weekly basis. They act as an extension to your team, ensuring you are getting the most out of our solution.
4 Proven Steps to Profit
Our four-step deployment process continuously validates expected benefits to make sure we deliver maximum value. Our clients have seen annual profit improvements between 1% and 3% of sales. That’s ten to thirty million dollars a year for a billion dollar retailer – money that drops right to the bottom line.
Multi-Echelon Means a Better Answer
In order to determine how much inventory to hold at a DC, you need to know the true demand on that DC. A non-traditional approach is to look at the forecasted consumer demand at the stores that the DC services. However, that doesn’t take into account current levels of inventory at those stores or the timing of future inventory level fluctuations driven by store reorderpoints.
That’s why our DC replenishment solution leverages the reorderpoints generated by store replenishment, along with current SKU-store inventory positions, to determine the forecast of orders needed to calculate a more effective DC reorderpoint.
Retail Is More Than Brick-and-Mortar
You don’t just service store demand out of your DCs – you have other channels to think about, like your website, or catalog sales. We include a forecast of demand for such channels, incorporating their unique seasonality and promotion responses, and then take into account their demand variability when determining the level of inventory needed at the DC.
Don’t Treat the Internet Like Just Another Store
If you treat your website like a brick-and-mortar location, with its own store reorderpoints, you may be missing out on sales. That’s because when you have higher than expected demand from the Web, you don’t want to be artificially limited to a pool of inventory dictated by a store reorderpoint – you should be able to draw on whatever inventory you have on hand at the DC to satisfy your online customers. So instead of using store reorderpoints, we calculate a Direct Reserve quantity, which is only available for Internet and Catalog sales. When DC inventory drops below that amount, you should stop filling orders for stores (which already have their own safety stock), but keep honoring online orders (which represent an immediate sale).
The best way to make sure your vendors will reliably fill your orders is to let them know ahead of time what those orders are going to be. That enables them to produce goods with greater confidence and have them available when your orders arrive. As part of our DC replenishment solution, we generate a 52 week forecast of the vendor orders you will place for every item. The forecast is based on what you currently own, and expected future demand on the DC. Our clients who have shared those forecasts with their vendors have been able to dramatically improve fulfillment rates and reduce average lead times, resulting in higher sales with lower inventory costs.
The Bottom Line: 4R’s DC Replenishment Solution Will Boost Profitability
4R’s DC replenishment solution boosts profitability in two ways:
- By combining our store and DC replenishment solutions, our clients have been able to reduce total system inventory costs while enjoying higher profits. That’s because with profit-optimal store inventory levels you can generally run your DC leaner without losing sales.
- Collaboration with your vendors will improve fulfillment leading to higher sales, and reduce inventory costs for safety stock.
We Guarantee a Profit Improvement
We are so confident that our store and DC replenishment solutions together produce a measurable profit improvement, we are willing to guarantee it.