Replenishment Planning Involving Promotions
Use
Once a promotion is in the planning stage, the Replenishment Planning function becomes aware of that upcoming promotion.
For inventory reduction promotions or for one-time purchases of a set quantity of promotion merchandise, no replenishment planning is needed. But in other cases, the retailer must plan to have enough stock on hand to meet customer demand. If insufficient stock is available in the distribution center for the promotion, the replenishment planning function is invoked to generate purchase orders.
Features
Stock transfer orders are created when a store’s required promotion quantity is greater than 0 and stock will be shipped directly from the distribution center to the stores. If the stock is to be drop-shipped by the vendors to the stores, then store purchase orders are created instead of stock transfer orders. In this latter case, the Replenishment Planning function is invoked.
When a distribution center plans article replenishment on a regular frequency, R/3 looks at past periods to determine how much stock is needed for the upcoming period. This assumes normal sales volume. But if a promotion is planned for that period, sales volume will increase, and more stock than usual will be needed.
R/3 will first determine the normal replenishment quantity for the upcoming period. Then it looks to see if a promotion for this article will occur during the upcoming period. If so, R/3 displays a message indicating that a promotion is planned and the time schedule for it, but will not suggest how much extra stock will be needed to meet the promotion demand.
A distribution center is planning replenishments for next month. For a given article, normal usage is 80 pieces per month. However, a promotion scheduled to begin near the end of the month will require 120 pieces for the promotion alone. For these 120 pieces, stock transfer orders or deliveries already exist in the system for the promotion. The system will suggest a quantity of at least 120, but will not take into account the normal 80 plus the 120. The user has the option of accepting the 120 or increasing the quantity.
Activities
The stock planner can look at the promotion data and change the quantity suggested by the system. If the required promotion merchandise is already on hand, but should be reserved for the promotion and excluded from the planning process, then the merchandise must be posted to a special promotion stock location which is excluded from the planning process. Automatic storage location determination ensures that all stock movements for the promotion merchandise will be done from that location.
The replenishment planning program takes existing purchase orders and stock transport orders into account when calculating available stock and replenishment quantities.