Product lead time should only dictate the amount kept at the DCs. Most stores have a truck schedule where as long as product is at the DC, the lead time is only a day or two once the stock drops below the amount necessary for replenishment. It is far more efficient for a pallet of a certain DPCI to be held in storage in 1 spot at the DC and sent out as necessary to the stores than it is to blast dozens of stores with it at once whether they need it or not.
For most product in most stores, it should be as simple as "when o/h drops below max capacity - case size + projected sales until product arrives at store, then ship". For example, a case of deodorant carries 6 eaches and the floor capacity is 12. If I have 12 on hand and sell 4 and the item is forecasted to sell another 2 by the next time I can get it on the truck, then send it. Since we get a truck daily, it's not likely I'm going to sell the other 8 before it comes in. If I was a low volume store, the chance of selling the rest is even lower.
Contrast this with a real life example of our current system. I received 30 bikes of just 1 DPCI during the holiday season. Ok, it's the holidays and it's going in the ad. It's a little ambitious as we've never sold that many of that particular bike before in previous seasons but whatever. Our bike builder makes sure to display them prominently and...only slightly more sales than usual. Than we find out we're the only store in our district to even receive them. A major metroplex and 1 store gets 30 ad bikes and everyone else has to tell prospective buyers to drive to us?
As a result, we sold about half of them and it took the entire following year to sell the rest (while still getting them in from the DC). How many bikes would have been sold if they had allocated the available stock in a way that wasn't stupid? How many people said "screw driving halfway across the city, I'll just get a bike from Wal-Mart instead"?
After 20 years at Target, I call bullshit on that. I have seen literally hundreds, if not thousands of examples to the contrary.
The absolute worst example I can think of is canned vegetables at my store. One year, we received 4 pallets of assorted canned Del-Monte for the holidays. That by itself is no big deal, it's the holiday season and we can expect to sell those. In the latter half of the season, they kept coming in and replenishing those sales and we still had 3 pallets total by the end of January. That by itself should be no big deal. Using a replenishment system that wasn't retarded, we should be able to make sure our o/h counts stayed up to date and sell through them eventually without further replenishment from the DC. After all, if you have literally 1500 cans of cut green beans in location and the o/h is accurate, obviously the system should take that into account right?
Nope. They kept fucking coming in all year; faster than we could sell them. By the next holiday season, we had 4 pallets of vegetables in location and received another 4 for the holiday allocation. We had tried multiple times to sweep them back but couldn't. Since they came in as palletized assortments, they didn't come with the original plastic wrap that the casepacks do. They came in as loose traypacks arranged on the pallet which was then shrink-wrapped. Since sweeps required all original case packaging, they got sent right back. It took our regional VP showing up and actually looking in the backroom for more than 30 seconds to make it stop.