Continuous replenishment programs provide an opportunity for suppliers and customers to work together to establish logistics processes that create value for both parties.
Establish Strategic Relationships
APQC’s data indicates that establishing continuous replenishment programs for customers can lead to lower overall logistics costs and fewer FTEs in the logistics function. If a supplier has access to the inventory information of its customers, this simplifies order processing by eliminating the need for purchase orders and other paperwork. It also provides suppliers with the ability to better plan production around demand, which can lead to a reduction in inventory as well as in employees needed for warehousing. However, continuous replenishment programs do not seem to have much effect on the amount of deliveries made on time, correct and without damage.
It is important to note that the benefit of establishing a continuous replenishment program goes beyond what can be immediately seen in logistics metrics. Suppliers can use these programs to further the development of strategic relationships with customers. Continuous replenishment programs provide an opportunity for suppliers and customers to work together to establish logistics processes that create value for both parties.
APQC is a member-based nonprofit and a proponent of benchmarking and best practice business research. Working with more than 500 organizations worldwide in all industries, APQC focuses on providing organizations with the information they need to work smarter, faster and with confidence.
