In the US alone, the untapped working capital potential is estimated at $1.76 trillion. European companies must cope with a similar challenge of €1.3 trillion. This capital is urgently needed for investments, innovation, and growth.
Since this development is not a temporary phenomenon, companies should question how their liquidity can be secured and optimized in the long term. A large portion of tied-up capital is often stuck in suboptimal inventories – this is precisely where modern, AI-supported replenishment comes in.
Why is Working Capital Rising So Dramatically?
The causes of rising working capital are multifaceted and cross-industry. Since 2020, companies have recorded a 28 percent increase in capital commitment, with all important working capital metrics deteriorating simultaneously for the first time in a decade. A significant driver is ongoing inflation, which has been pushing up the absolute values of inventories and receivables since 2021. When raw material prices and production costs rise, capital requirements automatically increase – even with constant quantities. This development is particularly hard-hitting as financing costs have simultaneously exploded due to rising interest rates. Where companies could previously tie up capital at almost no cost, interest rates of 6 to 11 percent now apply.
A second factor is persistent supply chain disruptions. Disruptions like the Red Sea crisis, where container traffic collapsed by 75 percent, force companies into longer transport routes and higher safety stocks. Delivery times extend by several days while freight costs soar. This uncertainty leads companies to increase their buffer stocks – an understandable but capital-intensive reaction.
Additionally, there's the geopolitical fragmentation of world markets. Trade restrictions have tripled since 2019, while dependency on individual suppliers has been recognized as a risk. Companies are therefore increasingly building redundant supply chains and maintaining stocks in multiple regions. What appears sensible from a risk perspective ties up considerable capital.
Replenishment: The Underestimated Lever in Working Capital Management
A large portion of tied-up capital is frequently stuck in suboptimally managed inventories. This is where our intelligent replenishment solution comes in.
What Exactly is Replenishment?
Replenishment basically means systematic control of goods replenishment. Instead of relying on gut feeling or rigid rules, our software uses AI-based demand forecasts combined with dynamic inventory analyses. The system continuously captures inventory data, sales patterns, and delivery times, recognizes patterns and deviations, and automatically recommends optimal ordering measures.
A crucial difference from conventional solutions lies in flexible individual item management. The tool plans individually at the item level, automatically creates order suggestions, and adapts them to new data in real-time. Based on historical patterns, seasonal trends, and external factors, a dynamic purchasing strategy emerges that flexibly responds to changes.
Automated Alerts Instead of Endless Lists
To always stay up-to-date, you receive constant alerts for critical reorders from our replenishment system. Particularly relevant items are automatically highlighted – for example, in case of delivery problems or demand spikes. This allows purchasers to work more focused and efficiently, instead of clicking through thousands of positions.
This intelligent prioritization ensures that critical products requiring immediate action no longer get lost in the masses. Simultaneously, routine decisions are automated, freeing up time for strategic tasks.
Simulate Scenarios, Make Informed Decisions
With clear dashboards, simulation functions, and real-time transparency, users always keep future scenarios in view and can make data-based decisions at any time.
Teams can test different strategies: What happens, for example, with changed safety stocks? Which supplier offers the best overall package?
For you, this means less operational stress, better inventory levels, and significantly more robust supply security – even in uncertain times.
Three Central Advantages for Your Working Capital
Clear Action Recommendations and Alerts The tool delivers concrete, data-based suggestions – automatically and always comprehensible, including alerts for critical products. This not only reduces wrong decisions but also accelerates response time for important events.
Dynamic Real-time Adaptation Order quantities and timing continuously adapt to demand, delivery times, and target specifications. This flexibility is crucial in volatile markets and reduces both over- and understocking.
Integrated Scenario Tools The possibility for optimal supplier and safety stock strategy creates transparency about the impacts of different decisions. This allows optimal balancing of capital commitment and service level.
Why Do Companies Need a Replenishment Tool?
Many companies struggle with typical challenges in replenishment planning:
- Fragmented tools and manual Excel lists without overall overview
- Decisions based on gut feeling instead of valid data
- Too late reaction to demand changes or delivery delays
- No clear prioritization of critical products
- High effort for routine decisions with simultaneous lack of time for strategic questions
These inefficiencies usually lead directly to increased working capital. Safety stocks are increased across the board instead of being optimized specifically. Excess stocks of slow-moving items tie up capital while fast-moving items are frequently unavailable.
Integration as Success Factor
A decisive advantage of our replenishment solution is seamless integration into existing systems. The software can be integrated into ERP, planning, and merchandise management systems to ensure continuous processes without additional effort.
Your company remains flexible. You define the framework conditions such as service levels, minimum quantities, or target stocks. The AI automatically plans the best replenishment decisions within these specifications.
Who is Intelligent Replenishment Suitable For?
The tool is particularly suitable for companies with:
- Many items and complex assortments
- High inventory commitment or fluctuating demand
- Need for precise replenishment control at SKU level
- The goal of automating purchasing processes while simultaneously reducing risks
Industries such as retail, manufacturing, consumer goods, logistics, or spare parts management particularly benefit from the automation and optimization of their replenishment.
Conclusion
Current working capital problems require new approaches. Intelligent replenishment offers a concrete, quickly implementable path to optimization. Through the combination of AI-based forecasts, automated action recommendations, and intelligent prioritization, inventories can be significantly reduced without increasing the risk to delivery capability.