Overview of Inventory Rebalancing

The inventory rebalancing feature enables you to rebalance an item's inventory across your supply chain.

Because of varying demands and supplies within your supply chain, some locations end up with excess inventory and others with inventory shortages. While excess inventory increases your holding costs, inventory shortages result in lost sales. By using the inventory rebalancing feature, you can move items from locations with excess inventory to locations with inventory shortages.

You can enable the inventory rebalancing feature for a replenishment plan. Once you enable the feature, it's run before the replenishment planning process. In a replenishment plan that uses the functionality for inventory rebalancing along with the functionality for multiechelon replenishment planning, inventory rebalancing is first done for the entire supply chain before multiechelon replenishment planning is done.

You can set up your replenishment plan for automatic release or manual release of the planned orders generated after inventory rebalancing.

Salient Features of Inventory Rebalancing

You can do the following using this feature:

Reposition inventory in your supply chain by using clusters that consist of locations, regions, or zones.

If the clusters consist of regions or zones, inventory rebalancing is performed for the locations in these regions or zones. The locations should be connected with shipping methods.
Specify the supplies and demands that are used in the calculation of excess inventory and inventory shortages.
Specify if a check should be made for locations with excess inventory that can completely meet inventory shortages so that the number of planned orders is reduced.
Specify if the safety stock for an item-location combination is used in the calculation of the inventory shortage.

You can also set a percentage of safety stock that's reserved before excess inventory is calculated for the item-location combination.
Set windows for computing the excess inventory or inventory shortage for each item within a location of a cluster.
Obtain plan recommendations for moving items from locations with excess inventory to those with inventory shortages.

Planned inbound orders and planned outbound orders are created with the use of defined shipping methods between locations in a cluster. Excess inventory might be transferred to a sweep location that's inside or outside the cluster.

Oracle Replenishment Planning recognizes these planned inbound orders as firm supplies before generating planned orders from upstream sources.
Use embedded analytics to evaluate the effectiveness of inventory rebalancing.
Optimize inventory levels in your supply chain, and minimize the costs of procuring inventory from suppliers or sourcing inventory from upstream facilities.
Improve customer satisfaction by fulfilling demands at locations with inventory shortages.

Additional Points About Inventory Rebalancing

Note these additional points about inventory rebalancing:

You needn't define sourcing rules to use the inventory rebalancing feature.
The feature doesn't support order modifiers.
You can't use the feature in a replenishment plan that's set up for policy comparison.
You can't use the feature in a replenishment plan that's set up for incremental planning.
You can use the feature in replenishment plans with the daily, weekly, period, or monthly planning time level.
The excess inventory and inventory shortages are calculated as on the plan start date after consideration of the supplies and demands within the excess and shortage computation windows. Planned orders are then created with the order dates as the plan start date after consideration of the calendars for item-location combinations.

Replenishment Planning doesn't perform time-phased evaluation of excess inventory and inventory shortages and doesn't make time-phased inventory rebalancing recommendations.
When the feature for inventory rebalancing is used along with the feature for multiechelon replenishment planning, if the unit of measure (UOM) for your policy parameters is days, then the Reserved Safety Stock measure is calculated on the basis of the safety stock that doesn't include the unconstrained planned order demand.
The hold dates and expiration dates for on-hand lots are also supported in inventory rebalancing. When you create a cluster for inventory rebalancing, you can specify the expiration days tolerance for on-hand lots. Any on-hand lot with an expiration date within the specified tolerance isn't considered as supply during inventory rebalancing.
After the suggested due date is calculated on the basis of the hold date, if the suggested due date falls outside the windows for calculation of the excess inventory and inventory shortage, then the on-hand lot isn't used for inventory rebalancing.
After the inventory rebalancing process, the planned outbound shipments that are generated are considered as a part of the Total Demand measure and used in the computation of the Expired Lot Quantity measure.
You must add the Cluster and Source dimensions to the dimension catalog of the replenishment plan for which you've selected the Rebalance inventory check box on the Plan Options page.