Automatic Replenishment

Automatic Replenishment

 Automatic Replenishment

Automatic Replenishment Window

Overview

HandiFox provides an Automatic Replenishment feature that allows you to automatically create purchase orders to restock inventory based on various criteria. This guide will explain how to use this feature and the different replenishment methods available.

Accessing Automatic Replenishment

  1. Navigate to Purchases → Automatic Replenishment.
  2. Select the Site where you want to replenish inventory.

Replenishment Methods

There are four main ways to automatically replenish inventory:

  1. Quantity Sold for the Period
  2. Average Sales Rate for the Period
  3. Reorder Point & Desired Quantity on Hand
  4. Quantity on Hand Forecasting

1. Quantity Sold for the Period

This option is suitable when you reorder products regularly, for example once a week, and want to replenish them according to your sales volumes for the next week.
For example, you have 10 pens on Monday, during the week you sold 7 pens, and on Saturday you want to replenish pens so that you have enough till next Saturday. 

How It Works:

  • The system calculates the quantity sold since a selected date and adds any open sales orders.
  • It reduces the total by subtracting open purchase orders and the current quantity on hand (QOH).
 Quantities on open Purchase Orders are taken into account by default to avoid multiple duplicate purchase orders (see options for replenishment below).
 Quantities on open Sales Orders are taken into account by default so you may fulfill them (see options for replenishment below).

 Please do not forget to close open Sales and Purchase Orders if they are not relevant anymore.

If the calculated replenishment quantity is 0 or less, then the product is not reordered and it will not be shown on the list (see options for replenishment below).

Example:

  • You start with 10 pens on Monday.
  • You sell 7 pens during the week.
  • You have open Sales Orders for 5 pens and expect 4 pens from your vendor.
  • Your current QOH is 3.

The system calculates the replenishment as follows:

7 (sold) + 5 (on SO) - 4 (on PO) - 3 (QOH) = 5 pens to order
In other words, we need to reserve 7 for future invoices and we need 5 more to fulfill the open sales order. So, we need 12 for the next week. We already have 3, and 4 will be received against PO. Thus, we need 5 more to order.


2. Average Sales Rate for the Period

This option is used when you want to restock your products based on your daily sales rates so that the restocked products will last till a specified future date.

How It Works:

  1. The system calculates average daily sales for the product from the selected date.
  2. The resulted quantity is multiplied by the number of days from now till the selected date in future.
  3. Adds the quantity on open sales orders.
  4. The system reduces the resulting quantity by the quantity on open purchase orders and current QOH value
If the calculated replenishment quantity is 0 or less, then the product is not reordered and it will not be shown on the list (see options for replenishment below).

 Quantity on open POs and open SOs can be excluded from calculations (see options for replenishment below).

Example:

  • You have 3 pens on hand and need to restock for the next two weeks.
  • You sold 54 pens in the last 30 days, giving an average daily sales rate of 1.8 pens per day.
  • You need 25.2 pens for 14 days (1.8 pens/day × 14 days).
  • You also have open Sales Orders for 5 pens and expect 4 pens from your vendor.

The system calculates the replenishment as follows:

25.2 (needed for 2 weeks) + 5 (on SO) - 4 (on PO) - 3 (QOH) = 23.2 pens to order

3. Reorder Point & Desired Quantity on Hand

The Reorder Point & Desired Quantity on Hand method is used when you want to replenish stock only when it reaches a certain level and restock to a predefined quantity.

How It Works:

  • The Reorder Point (ROP) is the level at which your products need to be replenished. It acts as a trigger, indicating when it's time to place an order to avoid stockouts.
  • The Desired Quantity on Hand (QOH) is the level you want to restock to, ensuring you have sufficient inventory.

These values can be set for each product on each site in the Reordering page.

Step-by-Step Calculation:

  1. Determine if the Product Should Be Reordered:

    • The system checks the current QOH, adds the quantity on open Purchase Orders (PO), and subtracts the quantity on open Sales Orders (SO).
    • If the result is less than or equal to the Reorder Point, the product needs to be reordered. If the result is negative, the product should also be reordered.

  2. Calculate How Much to Reorder:

    • The system subtracts the current QOH and the quantity on open POs from the Desired QOH and adds the quantity on open SOs.
    • If the calculated replenishment quantity is 0 or less, the product will not be reordered and won't appear in the list.

Example:

  • Reorder Point (ROP) for pens: 3
  • Desired QOH: 20
  • Current QOH: 5
  • Open Sales Orders: 7
  • Open Purchase Orders: 4
Calculation:
QOH (5) + Open PO (4) - Open SO (7) = 2 pens
Since 2 pens are less than the ROP of 3, the system triggers a reorder.

Now, the quantity to reorder is calculated:
Desired QOH (20) - QOH (5) - Open PO (4) + Open SO (7) = 18 pens
So, you will need to order 18 pens.

Additional Features: Case Size and Rounding

When dealing with wholesale suppliers, products may need to be ordered in bulk. You can specify the Case Size, which represents the minimum quantity that must be ordered (e.g., pens supplied in cases of 100). The ordered quantity will be rounded based on the Reorder Rounding settings.

There are three rounding options:

  • To nearest: Uses standard rounding. E.g., 150 will be rounded to 200, while 149 will be rounded to 100.
  • Up to nearest: Always rounds up. E.g., 101 will be rounded to 200.
  • Down to nearest: Always rounds down. E.g., 199 will be rounded to 100.

Both Case Size and Reorder Rounding apply across all replenishment methods, ensuring orders are aligned with your vendor’s minimum order requirements.

4. Quantity on Hand Forecasting

This method estimates how long your current inventory will last based on average weekly sales and predicts when you will need to reorder.

How It Works:

  • The system uses the average weekly sales rate for a specified period.
  • It calculates how many weeks the product will last, given the current QOH and weekly sales.
  • The item is displayed in the list only if the current QOH is at or below the reorder point (ROP).

Example:

  • You sold 54 pens in the last 30 days, with an ROP of 5 pens and a current QOH of 3.
  • The system calculates that you will run out of pens in approximately 1.6 days (~0 weeks).
  • The resulted number of days are always rounded down to weeks. In other words, 6 days will be rounded to 0 weeks.

Additional options

  1. Show all items: Displays all items, including those that don't need to be reordered based on current calculations.
  2. Show alternative vendors: (display each item several times, once for each alternative vendor) it is helpful if you have several vendors for each item and regularly order items from alternative vendors. For each item you will see all its vendors with their costs on one page without having to click on the Vendor dropdown.
  3. Include Quantity on PO/SO in calculations: These checkboxes let you decide whether to include the quantity on open purchase orders (PO) and sales orders (SO) in the replenishment calculations.

Conclusion

The Automatic Replenishment feature in HandiFox allows you to efficiently manage inventory by automatically generating purchase orders based on various sales and stock levels. By choosing the appropriate replenishment method and adjusting the additional options, you can ensure your inventory levels are maintained without over-ordering.








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