When Should You Use This Workflow?
This workflow is specifically designed for hub-and-spoke inventory models, where a central distribution center (DC, hub, or replenishment location) replenishes satellite locations (branches, spokes or requirement locations). If your branches source inventory from a central hub rather than directly from a vendor, this process ensures you buy the right inventory at the right place.
Why It Matters
In hub-and-spoke models, it’s common for branch min/max levels to exceed the hub’s. This can lead to under-purchasing if the DC’s demand is calculated in isolation.
To fix this, the Transfer Replenishment + TBO workflow ensures that your DC's purchasing recommendations include downstream demand from all branches. Here's how it works.
How the Transfer Replenishment + TBO Workflow Works
In order for Transfer Replenishment and Transfer Backorders to work properly, you must first configure Replenishment Paths between your locations. This is how Recurrency knows what is a Distribution Center location (where you purchase inventory into) and what is a Branch (where you transfer inventory to).
1. Run Transfer Replenishment First
Use the Transfer Replenishment Report to recommend stock movements from your Hub to branches.
Recurrency will suggest Recommended Transfer Quantities, respecting the DC's min levels to avoid depleting it.
If the DC doesn’t have enough inventory, a Transfer Backorder (TBO) will be created.
2. Understand What the TBO Does
A TBO reserves the required quantity for the branch at the DC, marking it as “in transit.”
It reduces the DC’s available net stock, which is important for the next step.
3. Purchase for the DC (and Everyone Else)
When you run your purchase plan at the DC, Recurrency will:
Add the TBO quantities to the DC’s own min/max needs.
Recommend a PO that replenishes the DC itself and fulfills TBOs for all branches.
Once that inventory arrives at the DC, your ERP will automatically convert the TBO into a Transfer Order for the required amount, which will signal to your warehouse team that they need to move inventory to those branch locations
Example
Location | Min | Max | Net Stock | Transfer Replenishment Suggests | TBO Created? |
Branch A | 10 | 20 | 4 | 16 | Yes |
DC | 5 | 15 | 12 | 7 | Yes (for 9) |
DC sends 7 now
This drops the DC netstock to 5, which is its min
Create a Transfer Backorder for the remaining 9 at Branch A
DC net stock becomes -4 after TBO.
When purchasing, Recurrency recommends 19 units to bring the DC up to its max
Once that purchase order is fulfilled, a Transfer Order for 9 is automatically created in the ERP
That inventory is sent to Branch A, and it is now fully replenished, and the DC still has above it's minimum inventory level
Why Not Just Use Group Purchasing?
You can, but here’s Group Purchasing does not inherently respect your defined replenishment paths. You'd have to rebuild those paths separately in Group Purchasing. Group Purchasing is great for ad-hoc decisions where you want to bundle demand from multiple locations into a single PO.
But for multi-tier distribution models, TBO + Transfer Replenishment gives you a clear, consistent and traceable workflow.
FAQs
Q: What if my branch min/max is higher than the DC’s?
That’s okay! This workflow will catch that and generate TBOs accordingly. You don’t need to artificially inflate your DC’s min/max levels.
Q: How are TBOs resolved?
Once inventory is received at the DC, the TBOs can be resolved through standard ERP workflows. The exact mechanics change ERP to ERP but in P21, TBOs are automatically converted to Transfer Orders once inventory is available to transfer.