Inventory Balancing and Warehouse Distribution Strategy

The article treats inventory balancing across multiple self‑operated warehouses as a complex mathematical problem that requires enumerating many influencing factors and selecting the top ones as the foundation of a distribution strategy.

In the supply‑chain scenario, there are three inbound flows (procurement, sales return, transfer) and three outbound flows (sales, return to supplier, transfer). The core issue is how to achieve a reasonable inventory balance distribution across warehouses.

Inventory balance is critical in the procurement‑in, sales‑out chain: it determines where goods are stored after procurement, how inter‑warehouse transfers are balanced, and from which warehouse sales are fulfilled, ultimately aiming to reduce costs and improve efficiency.

Business characteristics and challenges include the need to consider many influencing factors that vary over time. Key factors identified are the ideal split ratio, warehouse characteristics, and channel stocking.

Ideal Split Ratio

The ideal split ratio is derived from historical data, business rules, product attributes, and logistics attributes, combined with cost considerations and forecasts. It guides the allocation of goods to warehouses to ensure that the selected fulfillment warehouse has stock when an order is placed.

Warehouse Types

Two types of internal warehouses are described:

Big Warehouse (大仓) : Large rented spaces with high storage capacity, supporting many SKUs and special categories.

Cloud Warehouse (云仓) : Smaller leased spaces operated by logistics partners, with lower fulfillment cost and faster turnover but limited SKU variety.

A comparison table highlights differences in fulfillment cost, location distribution, storage features, shipping characteristics, and transfer constraints. Cloud warehouses act as sub‑warehouses, while the nearest big warehouse serves as the parent warehouse.

Channel Stocking

Because the business sells across multiple channels (e.g., JD, Tmall, key accounts), inventory is divided into shared and dedicated stock. Stock must be allocated both vertically (physical warehouses) and horizontally (business‑logic channels), adding dimensional complexity to the system design.

Solution Overview

The inventory balancing core is split into three services:

Split Ratio Service : Calculates the ideal split ratio for each SKU using historical sales and business constraints, serving as a bridge between online order routing and offline inventory distribution.

Procurement Distribution : Allocates incoming procurement quantities to warehouses according to the ideal split ratio and business rules, with a rule engine providing flexibility.

Inter‑Warehouse Transfer : Generates transfer recommendations to move stock closer to customers, considering stockout status, shortage quantity, transportation cost, and warehouse constraints.

Each component is illustrated with architecture diagrams (images omitted here) and relies on a rule engine to orchestrate execution flow and priority.

The article concludes that as the brand’s self‑operated e‑commerce expands, continuous optimization of warehouse distribution is essential for cost reduction and improved delivery experience.