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Important Factors for Replenishment beyond the Min-Max


Important Factors for Replenishment beyond the Min-Max
Important Factors for Replenishment beyond the Min-Max
February 17, 2018


Min-Max planning calculates whether the total available quantity is less than the minimum quantity to decide whether to suggest a new order. The main problem with the Min-Max method is that it leads to higher inventory levels and higher inventory levels lead to higher costs for the Retailer. Higher costs are tough to swallow in the highly competitive Indian Retail market. The main reason for these high costs is due to the promotion of large and infrequent orders. These large orders result in significantly higher than needed inventory levels for several days or weeks during the replenishment cycle. 

Min-Max drives larger orders for several reasons. The first one is due to the fear of stock-outs. The second reason is mainly due to the way it calculates the inventory levels. The calculation of inventory is mainly from the historical ERP functions, and hence these are not very effective in today’s modern retail market. Most of the ERP calculations are based on accurate data and any inaccuracy in the data leads to poor forecasting. 

In contrast, Ginesys provides Retailers with a solution that is more intuitive in nature. It has the ability to analyze the market demand and take into account what impact that particular Festive season has on the demand of a particular set of products. Hence at the end of the season, Retailers will not be supplied with the same product, but the priority will be given to the products that will be in demand for the next season. This is very useful in India since Retailers have a range of festive products that they sell and solutions like Ginesys can analyze the Festive seasons and take actions accordingly ensuring that the Retailers never run short of the items during that particular period of time. The solution offered at Ginesys ensures that Retailers are not only supplied with the items that are in high demand during that particular festive season but at the same time, it also ensures that Retailers are not piled up with stock at the end of the Festive seasons as well. 

The solution that we offer also takes the lead time into consideration which is highly beneficial to Retailers. Lead time is the time that elapses between the placing of an order and when the retailers actually receive the goods ordered. The longer the lead time, the larger the quantity of goods the firm must carry an inventory. Hence, here at Ginesys, our solution takes into account the requirements of the Retailers based on Forecasting of the sales and demand of the goods to ensure that the lead time is reduced as much as possible. Another factor that our solution takes into account is the Minimum-Order quantity, where unlike other software that allows customers to choose only between the minimum and maximum order quantities, at Ginesys we take into account various factors like the Sales of the previous month, season etc and calculate the exact amount of Inventory that the Retailers require. This helps increase the efficiency of the Retailers business and also helps reduce the unwanted stock in the Retailers inventory.

Our solution also provides retailers with reports and summaries of past replenishment, helping retailers to discover trends. This is critical for Retailers as it helps them plan out their strategy and order the exact amount of Inventory required to tackle that particular season. The solution offered by Ginesys not only takes into account the previous year’s sales value but it also considers factors like the growth of Retailer in question as well. Hence it is evident that Ginesys offers Retailers with tools that are intuitive and also keeps up with the growth that the Retailers undergoes every year ensuring long-term reliability and efficiency.