An Appetite for Change: Technology Transforming Grocery and Food Service
- 23 June 2023
- Scott Fenwick
Not long ago, personnel in grocery stores and food service locations had to check inventory levels for accuracy and buy needed stock using large, handheld scanners. Each store owned their own inventory and relied on store associates to make important decisions regarding when and how much to buy. As valuable as local store knowledge is, handling replenishment this way means there is no enterprise-wide consistency, no easy way to implement an overall inventory strategy and no way to achieve the inventory optimization that has benefitted other industries.
At the same time, because of the growth of omnichannel in grocery and food service, profitability rests upon better inventory management. That’s why today, leading grocery and food service retailers are transforming how they handle inventory. Armed with the right technology, they can centralize buying and free up in-store resources to focus on valued customers. These businesses get the best of both worlds, leveraging best practices – and applying automation to some processes – while still taking full advantage of local feedback and insights. The results of this new approach are better efficiency at the store and enterprise level, improved demand planning, reduced spoilage and optimized inventory management.
Manhattan Associates is helping usher in this fresh perspective to inventory optimization through five innovative technologies.
Shelf Life Management
Using machine learning, Manhattan’s forecasting solution analyzes buying trends and expiration dates on a product-by-product basis to continuously fine-tune replenishment. As an evolution of shelf life maximum technology, it brings demand forecasting to the cutting edge.
Shelf life maximum works by inputting the shelf life of a given product to create boundaries in the system. By incorporating the expirations into the ordering parameters, you can be absolutely certain that no matter what the item, the system will alert your personnel when they attempt to purchase more than you can possibly sell within that spoilage window. Implementing guardrails like this reduces waste and markdowns. Applying machine learning elevates the accuracy and sophistication of this technology exponentially.
A typical inventory management solution looks at the amount of product in the distribution center, and projected sales of that item, to forecast how much should be ordered and when. As stocks reach a certain point, replenishment is triggered. This is typical sawtooth logic.
However, no matter how solid the forecast, sometimes things go wrong and situations change. When this occurs, the risk of product spoilage in the DC rises, putting a grocer’s ability to service its customers in question. The complexity of the problem increases because different lots of a product are going to expire at different times. These “blindspots” in replenishment can result in costly rush shipments to stores, lost sales from product shortages on the shelves or, even worse, sunk costs on spoiled food.
This is where Manhattan’s expiry control technology can help. Our replenishment solution includes a unique approach to exploiting the lot-level expiration information available from most modern warehouse management systems. By factoring in expiration dates of different lots, our technology makes the sawtooth logic much more nuanced and sophisticated – in essence adding tiers – when determining how much product to order when expiration events are expected to occur.
This ensures that you’re buying enough to meet service levels, maintaining inventory levels that minimize spoilage and replacing the product that does expire.
Omni Inventory Optimization
As customers demand greater speed and convenience in their lives, omnichannel in grocery is emerging. Stores are offering a range of options, including curbside pickup, locker delivery, click and collect and home delivery, with new possibilities on the way. Every new consumer fulfillment option creates its own lift and shift on demand, making inventory management even more complicated.
Manhattan Omni Inventory Optimization (OIO) helps you implement omnichannel and maximize profitability. This first-of-its kind approach takes full advantage of all factors – network inventory, channel demand patterns and omnichannel fulfillment strategies – to better align inventory across the network. The result is lower costs, greater efficiency and a higher return on your inventory assets. OIO rebalances the fulfillment/inventory equation so grocery stores can offer the best possible shopper experiences at the lowest cost.
The one constant in the grocery and food service industries is promotions. Loyalty discounts, in-store sales, online sales, paper coupons, digital coupons and buy one, get one free are just a few examples. Every day, multiple offers are going out to customers, many of them overlapping. Determining the effectiveness of each promotion involves millions – even billions – of data points, making planning demand by hand nearly impossible.
Manhattan Demand Forecasting brings clarity to promotional planning. Using data science and machine learning, it turns mountains of data into an asset. This enables you to uncover the likely association and impact that each promotional event had on demand for every individual SKU, leading to improved inventory management, higher margins and lower markdowns.
As much as technology can help centralize inventory management, knowledge at the store level will always play a key role in bridging the gap between local personnel and centralized buying teams.
The new Manhattan Inventory Mobile app helps keep store associates involved in the inventory optimization process. The intuitive application ensures that stores have specific insights into what’s being bought and why, as well as what supply is expected and when. It also gives local associates a simple way to identify issues and provide insights to the centralized buying team to get the support they need.
Move into the Future With Manhattan
In an era of high customer demands and slim margins, better inventory management in grocery and food service is essential. Manhattan has a range of technology solutions to help you optimize your inventory, master omnichannel, untangle promotions, minimize spoilage and enhance inventory productivity, all while freeing up store personnel to focus on your number one asset – your customers. With Manhattan innovations, a higher level of inventory optimization is in store.
To find out how Manhattan can bring a fresh approach to your inventory, visit manh.com/active/inventory.