The practice of partnering between distribution channel members that changes the traditional replenishment process from distributor generated purchase orders, based on EOQs, to the replenishment of products based on actual and forecasted product demand. It is based on the logic of a “Pull” environment and requires accurate Inventory information to ensure waste is not generated.
A method typically used between retailers and distributors or manufacturers that use point of sale inventory and sales data to trigger automatic replenishments, with the vendor assuming responsibility for initiation and fulfillment.