Acute awareness of the consumer is important of course, but top this with the daily nuances of managing fresh and ultra-fresh products such as produce and milk, and it’s clear this is no bite-sized challenge, it’s BIG! Add to all this the fact that there is little sophistication in the market today to support fresh item management, especially in connecting consumer and store data and operational information to distribution centers, suppliers and corporate offices. The traditional approaches that offer the management of the siloed nodes and processes just don’t cut it.
For example, many retailers in the food space are managing the deli, bakery, produce and meat departments on separate systems without a link to consumer behavior and overall inventory or chain site visibility.
Fresh product has many nuances that require a more sophisticated approach. It’s about being nimble and managing the supply chain holistically and quickly.
Strong connections in the food chain, sharing and partnerships whether it’s a supplier, farmer, or CPG only strengthen and separate out the retail winners. The sharing of correct information and data is crucial. Some examples:
- Farmers need forecast information early, they need to know how many seeds to plant
- Distributors must know how many sandwiches or meal kits to make for their retail customers
- Stores need to know how much flour is needed for baking and in turn corporate needs total visibility to chainwide needs
Forecast sharing and a singular view of inventory and portals for collaborative visibility are not nice-to-haves, they’re imperative. Lags in a market launch could mean a loss in consumer loyalty and a leg up for your competition. When you have options to purchase — especially when it comes to buying fresh and local — buyer activities such as new Item launch, purchase deals, and spot buying can be overwhelming to manage. As a result, systems need to be inline on a single digital platform to mitigate risk.
Take the example of product deal buying or situations where suppliers and CPG are funding retailers. A strong digital platform is needed to ensure products are launched in time and shelves are stocked, correct prices reflected, and compliance tracked.
Spoilage Replenishment & Allocation
In an efficient food chain, improvements in waste elimination are monitored. It’s important to have visibility to use-by dates and plan not to exceed them. From a corporate and social responsibility standpoint, sometimes it’s better to be a little short than to have to throw away product. It’s essential to have systems that provide alerts to indicate issues with use-by dates, as well as corrective recommendations for quick actions by users.
Replenishment and Allocation should be on one platform – Fresh products’ short life require quick replenishment cycles and an allocation tool that is responsive. Imagine ordering lettuce into a warehouse and then re-distributing to stores multiple times during the day. This is short-life product can have only 1-2 days shelf, so it’s important to account for stock and understand real-time needs. Upon receipt of goods it’s key for a system to re-calculate what the real-time needs are based on current inventory. Stores may order one day in advance, and a day later, the goods are received in the DC and inventory is adjusted (waste may need to be accounted for in case of bad batches received). This is the kind of critical information that store operational associates need to understand. This is also important with the rise of the convenient format where minimal storage capacity is available so retailers need to be able to support multiple deliveries per day.
With the rise of fresh, healthy, and local, food retailers are growing connections to their local farmers. As a result, there needs to be an easy way to manage offers from multiple vendors. For example, a retailer may have many offers for apples that they need to manage from various suppliers. Or, they may want to buy from one supplier but the supplier may not be able to support all of the need, so the retailer must account for buying from alternate suppliers.
Data and science must support nimble and varied sourcing options as well as demand matching for like products. This is common for many of Symphony GOLD customers in France where daily offers are made for fresh product like fish, fruits and veggies. There may be one-day-only offers for specific fish or farmers making offers to the stores.
- The bakery: When you are planning and producing product such as bread, the ability to make intra-day batch runs (morning and afternoon as an example) is important, so real-time inventory is critical to understand as well as intra-day forecasts.
- The deli and meat counters: With prepared food, growing management here is essential. Weighted inventory management is key, so having a system that can recognize blocks of cheese or cuts of meat and understand how this impacts overall inventory for the store and chain as well as forecasting the sales is necessary.
Store operations must have an effective way to build and manage recipes, not only to manage the individual components that go into building a meal or a recipe, or provide nutritional contents, but managing the overall inventory that’s needed. For example, tomato sauce could be used to make various soups, meatloaf, lasagna, so understanding total need for production and then relating that to an overall corporation is important.
Consumers want to understand where their food comes from. To provide full transparency to ingredient/fresh management all the necessary ingredients and fresh data elements (measurements, packaging, sourcing, nutritional information, allergen containment), an effective digital platform must track and analyze what food contains.
Food can be like fashion. We see trends come and go and lifecycles can be short. The market is making shifts to support the nuances of these items but many retailers are managing these products manually, more like an art than utilizing science. With the right tools and a digital platform, retailers can become more efficient in fresh item management.
At Symphony RetailAI we built our store operations and supply chain solutions from the ground up to support the nuances of extreme short life – 1-2 days replenishment, expire dates, spoilage – all which require a strong digital core tied to an ecosystem of capabilities. Our solutions have capabilities across all areas of the supply chain from inventory to data and order management, forecasting replenishment, vendor management warehouse management solutions, to store operations.