Replenishment paths define how inventory should move through your various locations and can be broken down into three main components:
Requirement Location: The location within the distribution network where the demand for inventory arises.
Replenishment Location: The location from which the requirement location receives its stock, often a central or regional warehouse. In a hub and spoke model, this location aggregates demand from multiple requirement locations and holds inventory to distribute accordingly.
Purchase Location: The location in the supply chain where procurement activities take place, typically the central warehouse or main distribution center.
A single location can serve multiple roles for a given item. For example:
Item ABC is stocked in San Francisco.
San Francisco purchases this item directly from the supplier.
In this case, San Francisco serves as the Requirement, Replenishment, and Purchase location for item ABC.
In a hub-and-spoke configuration, the setup might look like this:
Item ABC is stocked in San Francisco and Sacramento
Both locations pull inventory from Los Angeles
The purchasing team in Los Angeles is responsible for stocking enough inventory to meet demand in Los Angeles, San Francisco, and Sacramento
For a more complex example, Los Angeles could be a regional hub that pulls items from a national warehouse in Bakersfield:
Replenishment paths are specific to each item-location pair. General defaults can be set at a location level (e.g., San Francisco replenishes all inventory from Los Angeles) or at a supplier level (e.g., San Francisco replenishes all inventory from Supplier X through Los Angeles). In practice, distributors often have exceptions to these rules on an item-by-item basis.
In Recurrency, replenishment paths are read as defined in your ERP. After enabling the hub-and-spoke model type, Recurrency displays the replenishment path for each item as shown below:
In this example, the highlighted item is stocked at San Francisco, but should replenish from Los Angeles. When you hover over the Replenishment Location, we show the full path which also lists Los Angeles as the Purchase Location.