To learn how K3S-Replenish works, it will first be important to understand its use of time supply. Time supply represents a number of days of supply for a product or vendor. It considers your inventory levels using days as the unit of measure. If you know how many products you sell a day, then you can figure out how much you need for a specific amount of days for each product. The system balances all items equally through time supply. Product A could move 10 in a day while Product B moves 20. Though they move a different amount, the system can convert them both to one day of supply and order the products in equal day amounts. If you wanted to increase this order to meet your vendor minimum, the most efficient way is to add inventory days across all products to keep your vendor level balanced.
Being able to measure inventory as time is very useful because the time supply calculations work in order to reduce excess inventory as the measure of days. The system allows the user to see how many days of inventory they currently have and need. It can convert everything to time and balance it across all items.
Review the following terms to gain a better understanding of how the system uses Time Supply. After becoming familiar with the terms, continue to read the section to learn how each component works.
- Lead Time: The average amount of time between placing the order and receiving the order for the product.
- Order Cycle: The order frequency and the amount of time between placing orders.
- Safety Stock: The level in days of extra stock of inventory that is maintained in order to avoid a stock out.
- Order Point: The level of inventory where replenishment is needed. The Order Point is sometimes referred to as the reorder point. It is determined by four factors which include safety stock, lead time, order cycle, and other days. It is the unit balance each product should maintain to cover its cycle and safety stock while not carrying excess inventory.
- Order Up To: The maximum amount of days of inventory the system will order.
- Other Days: Days added to the order point in addition to safety stock, lead time, and order cycle for various reasons (i.e. Reaching Vendor Minimum, Holidays, Deals, Forward Buying).