© Blue Yonder
Retail software specialist Blue Yonder has debuted a new system that helps grocery retailers to optimise replenishment decisions and processes for fresh produce.
Blue Yonder’s Replenishment Organization is a machine-learning solution that provides grocers with a level of control and precision that has been difficult to manage in fresh assortments until now, the company said.
The result is that, by automating replenishment decisions at the lowest level of the business, retailers can align category plans to daily trading decisions and close the gap between trading and the supply chain. The software simultaneously optimises demand and KPIs, ensuring that individual ordering decisions align with the retailer’s strategic goals and results. For instance, it can adapt to prioritise margins over revenues as the retailer requires.
Its launch, Blue Yonder said, has arrived at a time ‘of declining profitability and significant changes in consumer lifestyles’, which have put retailers under pressure to deliver freshness and optimal availability without the ability to manage the cost to serve.
Typically, it added, 40% of grocery revenue is driven by fresh, according to the latest McKinsey report; honing this part of the proposition can be the key to unlocking sales potential and delivering the right customer experience.
Blue Yonder founder Michael Feindt said: “The real battle for grocery success lies in fresh, and getting that right profitably. The struggle is unsurprising as ‘gut feel’ replenishment for fresh is still common. The new retail world has seen an increase in the complexity of effective decision making. Gut feel – and decisions based on historical data – are not good enough. For the first time, Blue Yonder Replenishment Optimization will help grocery turn challenges to opportunity, delivering the perfect combination of best fresh, best availability without waste or missed sales, ultimately securing their future success.”
Feindt’s comments are backed by research published by Blue Yonder in October, and reported at the time by FoodBev, that showed almost 50% of retail managers were still using gut instinct as the main driver of stock replenishment decisions.
It found that, in spite of a rise in accurate algorithms for automated replenishment and demand planning, 46% of surveyed directors in the UK say that replenishment is still an entirely manual process and the same amount saying that it was fully automated. A further 30% believed that instinct-based decision making was slowing them down.
That is where the company expects to be able to add new value, particularly with reference to fresh offerings, with its latest technology.
Kemal Koeskal, Blue Yonder’s vice-president product management, continued: “We have worked together with the industry to come up with additional functionality that we expect will reduce out of stock or waste scenarios by up to 50% – importantly improving service levels and margin contribution.
“Let’s take tomatoes as an example: if they do not sell in time, it is not just the inventory cost the grocer writes off; it is storage, transport, people costs, it’s the costs along the whole supply chain. On the flip side, if you don’t provide the best freshness, you risk customers going elsewhere and losing revenue.”
© FoodBev Media Ltd 2021
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