Question

What advantage does the company gain from replenishing it’s stores multiple times a week compared to a less frequent schedule? How does the frequency of replenishment affect the improved customer satisfaction?

Answer 1

Store replenishment when done several times a week lead to various benefits to the retailers. Some of them are discussed below:

• It helps in optimized forecasting of demand of the product.
• It helps in better inventory management.
• It constantly manages stock levels,sales and demand.
• It reduces process cost.
• Better inventory management leads to higher service levels and a better inventory turnover.
• It maximizes sales, reduces waste and lessens out of stock situations.
• Automation of the replenishment system can help managers deal with difficult situations in an easy way. Automation helps in constant update of demand , sales and the requirements of products (replenishment level) on the shelf helping in increasing customer satisfaction.
• It helps in point of sale control of inventory.
• It helps in optimising the performance of a particular store or a product.

A dissatisfied customer is very dangerous to a store. When a customer is not satisfied he will go tell 10 other people about what happened in turn bringing a bad name to the store/ company. Replenishment is directly linked to customer satisfaction. When the customer does not find what he's looking for on the shelf , he gets dissatisfied and leaves. Managers should make sure each product is replaced and stock levels are maintained well and product is available on the shelf, specially the fast moving products or those that have discount or off on them. During promotions managers should take special care of stock levels as the customer will go back dissatisfied for not finding the product. This customer will leave and print a wrong image in minds of the others leading to lesser footfalls in the store. Making sure the product is on the shelf as per the demand of the same (and not out of stock) leads to a happy customer in turn leading to better footfalls, better sales, better brand name, improved turnover and reduced cost.

Customer satisfaction is at the center of the whole game and rest all revolves around it.