Order replenishment and fulfillment are two terms that are often in use together, but they are not the same. When it comes to inventory management, it is important to understand the difference.
Replenishment
This is the process of reordering items that you have previously purchased in order to meet demand. For example, let’s say that you ordered 100 t-shirts, but now you are low on stock. Instead of creating a new order from scratch, you will “replenish” your current stock levels by reordering more t-shirts. This process moves inventory between facilities or between suppliers to meet your consumer demand.
Replenishment should occur when your products reach their reorder point. This is so that you can avoid stock shortages from occurring. In an inventory management system, it can calculate the reorder point based on the parameters you set for each item. For example, the min, max, lead times, and safety stock.
Fulfillment
Fulfillment is what takes a product from the supplier to their customer. This includes, but is not limited to: receiving, processing, delivery, and returns of the product. Often unique to each firm, these processess can vary in complexity. Replenishment focuses on the quantity of inventory being restocked, whereas fulfillment deals with the processes involved in completing an order.
You may think that fulfillment is a very simple process. But depending on your operations, it can become very complicated. That’s why it is vital to use an inventory management system that can cater to your needs. This will provide you with greater accuracy and visibility into your inventory processes.
Want to learn more? Check out Clear Spider’s Fulfillment and Replenishment Inventory Management.
