PR

In Amazon’s retail supply chain, Planned Replenishment is the standard procurement mechanism for most 1P (Vendor Central) vendors. It ensures that Amazon’s fulfilment centres (FCs) are restocked consistently without the need for manual order placement - balancing inventory health, instock rates, and working capital efficiency.

PR operates as part of Amazon’s automated demand forecasting and buying system, which continuously analyses sales data, seasonality, and vendor lead times to trigger new purchase orders.

How It Works:

1. Forecast Generation: Amazon’s algorithms forecast customer demand for each ASIN based on historical sales, price trends, and seasonality.
2. Inventory Assessment: The system compares available stock (on-hand + inbound) with forecasted demand and reorder thresholds.
3. PO Creation: When inventory falls below the replenishment threshold, Amazon automatically generates a Planned Replenishment PO.
4. Vendor Fulfilment: Vendors confirm and ship according to the PO delivery window.

Key Inputs:

• Vendor Lead Time (VLT)
• Procurement Lead Time (PLT)
• Sales velocity and forecasted demand
• Inventory position (on-hand, in-transit, on-order)
• Safety stock and reorder point settings

Benefits for Amazon:

• Continuous availability: Maintains high instock rates and prevents OOS (Out of Stock) situations.
• Automation: Reduces manual workload for Retail and Supply Chain teams.
• Cost efficiency: Balances inventory investment and fulfilment capacity.
• Customer satisfaction: Ensures consistent delivery promises and Prime availability.

Benefits for Vendors:

• Predictable demand: Provides steady, forecast-driven orders.
• Operational stability: Reduces manual negotiation and PO variability.
• Long-term planning: Enables better production scheduling and logistics forecasting.

Challenges:

• Forecast accuracy: Over- or under-forecasting can lead to excess stock or OOS.
• Limited manual control: Vendors cannot directly influence when or how much Amazon orders.
• Lead time dependencies: Inaccurate VLT or PLT values cause replenishment delays.
• Seasonal volatility: System adjustments may lag behind real-time demand spikes.

Why It Matters:
Planned Replenishment is at the core of Amazon’s retail inventory management, ensuring product availability through algorithmic buying. It replaces traditional manual ordering and enables efficient, scalable supply chain operations across thousands of ASINs.

Example:
A vendor selling protein powder operates under Planned Replenishment (PR). Amazon’s system forecasts increasing demand before Prime Day and automatically issues POs to restock FCs two weeks in advance, maintaining a 98% instock rate throughout the event.

In short:
PR (Planned Replenishment) is Amazon’s automated, forecast-based ordering system that continuously issues POs to vendors to maintain optimal stock levels, ensuring availability and operational efficiency across fulfilment centres.