Whether you’re in retail or logistics, a stock outage is bad news. It means annoyed customers, a drop in sales, and skyrocketing costs. If it lasts too long, your reputation might even take a hit.

That’s why more businesses are turning to automated replenishment. This technologically driven approach is helping companies to reduce errors, lower costs, and improve efficiency. It can be a game changer for e-commerce businesses seeking to grow.

Let’s look at what automated replenishment is, how it works and explore some key benefits of implementing it.

What is Automated Replenishment?

Automated replenishment is a technology driven approach to managing stock that reduces (or entirely removes) human input. Instead, the software is used to analyse stock levels, lead times, and expected sales requirements. It then automatically orders new stock, ensuring your inventory is replenished on time, without outages or wastage.

It’s also possible to automate any other stage of the process, from ordering, transportation, and storage to controlling online stock management, ensuring that customers are never let down, even if there are unexpected issues with your supply chain.

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Unlike traditional manual inventory management, which takes time and is prone to errors, automated replenishment systems use real-time data to maintain optimal stock levels, ensuring that products are always available without the risk of overstocking – an approach often taken to try and avoid running out of products.

The automated replenishment process also takes a holistic view of all aspects of inventory needs, from considering sales forecasts, historical data, and current market trends to predicting stock requirements and integrating them into existing warehouse management systems (WMS) to ensure accurate stock monitoring.

How Does Automated Replenishment Work?

Employees are counting products in the warehouse.

Let’s take a quick look at the process before we dig into the main benefits of implementing automated stock replenishment.

Setting reorder thresholds

The process begins by determining minimum and maximum stock levels, ensuring inventory meets demand without having an excess. This process can be done manually based on your own data or via automation and AI analysis of up-to-date data, including current sales figures, forecasted sales, and current market trends.

Real-time inventory monitoring

Continuous monitoring via integrated systems allows for immediate identification when stock levels drop below predefined thresholds. Technology can be incorporated into almost every aspect of the inventory monitoring process, from CRM systems linking sales and inventory systems to using data clean room technology to ensure all data shared is accurate and reliable.

Automated ordering process

When inventory falls below the minimum, the system automatically places orders. Again, this helps by eliminating manual entry and reduces potential human errors.

Receiving goods

The final part of the process is to ensure that the system is updated correctly when the ordered products are received. Any system is only as good as the information it has, so it’s crucial to monitor this part of the process to ensure accurate product data management throughout your system.

What are the Benefits of Using Automated Replenishment?

So, you now know what automated replenishment is, but how can it help you? Here are a few of it’s major benefits:

1. Eliminate stock outs

Let’s start with the big one: keeping products in stock. Removing human error and streamlining re-ordering are the best ways to try to eliminate stock outs, especially when you combine this with the detailed analysis that AI tools can perform on historical purchase data, market trends, and supply chain issues.

Having up-to-date sales data visualisation can also be a massive boon to sales teams, as it allows them to know when stock levels are running low. That way, marketing can be shifted to promote slower-selling products, further reducing the risk of stock outs.

2. Respond to inventory changes quickly

Automated systems respond faster than humans ever can. A warehouse manager might be fantastic, but he still has to come to work, do a stock take, and get the order written and ready to send. That all takes time.

Automated replenishment systems, on the other hand, can work tirelessly 24/7. If there is a rush on orders at 3 am on a Saturday, that’s fine! The order will be waiting in the supplier’s inbox when they log in in the morning.

Of course, that’s assuming the situation arises in the first place. With AI getting better than ever at predicting customer sales patterns, warehousing will likely be prepared for big sales days long before they happen.

3. Improve operational efficiency

Traditional inventory management techniques take time; as everyone knows, time is money. When someone has to do a stock take, manually write up orders, and contact suppliers, they’ll need to pay for their time. Automated systems, on the other hand, can work without ever stopping, keeping operating costs static, no matter how much they do.

Integration between systems is also a huge time saver. For example, it’s possible to automate the raising of a new order, integrate call scheduling software to help schedule deliveries and monitor automatic tracking to plan for the receipt of the order. That’s a ton of stress removed from your team, as they can get on with their day-to-day instead of having to keep checking back in.

They also don’t make mistakes. That means no wasted stock, no costly emergency deliveries to make up for errors, and no time wasted trying to solve problems.

4. Scale with growth

Another tremendous benefit to automated systems working around the clock is that they scale with growth, with minimal extra cost. Whereas there is a limit to the number of stock takes and orders a human can process, the amount that automated replenishment systems can handle is virtually limitless.

For growing businesses, this ability to scale can be a huge advantage, especially in smaller companies, where jumps in staffing levels can make a real difference to operational costs.

5. Better data analysis and forecasting

Automated systems provide valuable data on stock movement. From analysing lead times to stock requirements, they gather and use data to gain insights into sales trends and inventory needs, allowing for more informed decision-making.

Furthermore, the holistic nature of automated systems means they can integrate data from multiple systems, so problems are more easily identified. This is great for maintaining links between sales and warehousing or between order processing and logistics. With options like data warehouse migration to cloud solutions growing in popularity, you can share information throughout the business rather than being on-site.

6. Improved relationships

Stock outages not only cost money but also damage reputation. Was the item the customer required a birthday or anniversary present? Was it a crucial part of the production process? If so, delays may be disastrous. Getting orders right every time builds a reputation for reliability, meaning customers return repeatedly.

Plus, your relationship with your suppliers might improve—they’ll know you’re reliable with your orders and won’t have to get last-minute calls from you when you run out of stock.

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7. Sustainability

Everyone should be doing their bit for the planet. By optimising inventory levels, waste is reduced, contributing to more sustainable practices. This can be a major advantage for businesses that sell perishable products, as overordering can increase waste when unsold products go out of date. With automation, these date restrictions are accounted for in the ordering process.


While humans have many remarkable skills, there are some things we’re not so good at. That’s okay! Humans are also smart enough to devise solutions to imperfect memories, and automated replenishment systems are the latest and most efficient solution we’ve devised to help manage inventory.

By removing manual error and addressing some of the common challenges associated with inventory management, these systems allow businesses to streamline restocking processes, becoming more efficient, reducing costs and enhancing customer experience.

From improving accuracy and better response times to providing the data required to make better decisions, automated replenishment can help reduce errors, drive sales and grow e-commerce businesses.