Automated Replenishment System in Grocery

The retail sector is intense, dynamic, and highly competitive. Consumers are presented with an overabundance of choice – they know what they want and they want it now.

As a retailer, you have to be able to keep up with ever-evolving consumer behavior, while simultaneously being stable enough to weather any challenges you may encounter.

Therefore, you better make sure that your supply chain works like clockwork. It’s a competitive industry and if your supply chain fails to keep your shelves full of top-quality products, your customers will go elsewhere. Once gone, they’re very unlikely to come back.

That is why you need automatic replenishment.

What is an automatic replenishment system?

The first version of the automatic replenishment system was formed by Procter & Gamble in the United States back in the 1980s. At that time, the concept of quick customer response and continuous replenishment was developed, which is still effective today. Automatic replenishment is an improved version of the concept that is used to track sales of product categories. This technology increases the efficiency of such processes as:

• formation of the required assortment of goods;
• competent replenishment of stocks;
• preventing a surplus or shortage of goods in the warehouse;
• conducting more effective marketing campaigns.

The key condition for an effective consumer response is the introduction of electronic data interchange. This is the basis for auto-replenishment, which implies the use of special software. The software allows you to monitor the volume of sales of certain goods in real time and to receive information about the balances of goods in the warehouse and their deliveries. Also, automatic replenishment of stocks allows you to predict the demand for a particular product, respectively, and to quickly respond to all changes.

An important advantage of working with such software is also more effective work with suppliers. Thus, automated replenishment systems track the accuracy, efficiency, and speed of deliveries, and as a result, choose the most responsible, efficient, and reliable suppliers.

Related: How can liquor stores effectively manage their inventory?

One of the most valuable functions of such software is the automatic generation of most reports. This is important for managers who are known to spend most of their time filling out spreadsheets. The automatic replenishment system solves these problems automatically, which allows you to optimize the working time of specialists, allowing them to focus on more important tasks.

How does the automatic replenishment system work?

Automatic replenishment is a multifunctional solution that allows you to track and analyze almost all buying and selling processes with the overall aim of optimizing inventory management. There should not be any excess or missing inventories in the warehouse. The consumer should receive the goods they want on time. An automated replenishment system fulfills this demand.

How it works:

• The program is integrated into the trading system;
• The database includes products and stock control units, data on suppliers;
• The system of automatic replenishment in real-time displays where stocks are stored and their quantity for easy management;
• The sales volumes of certain categories are analyzed daily, the balances are assessed, and, if necessary, the order of the necessary positions is automatically generated;
• The replenishment system makes it easy to prioritize and highlight the most urgent tasks for managers;
• With the help of software tools, complex analytics of the dynamics of stocks, demand, and other indicators are carried out;
• Analysis of the work of suppliers is carried out, which allows optimizing logistics.

This makes the need to manually fill in reports and form orders obsolete, which allows you to save up to 90% of managers’ time. Therefore, an auto-replenishment system is an optimal solution for retail chains, regardless of their specifics.

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Automated replenishment for the successful expansion of the trading network

Let’s take a look at an example of our client and a successful retailer – Bee Market. This company has a network of so-called “next door” groceries in 30 locations in one city. It enjoys a high level of consumer traffic and retains a strong competitive performance characterized by creativity, innovation, and ambition.

For example, between September 2018 and April 2019 Bee Market opened three new stores, increased its turnover rate by 8%, and increased sales by 7%. The company maintained its personnel level, and crucially, its supply chain automation reached 80%.

Here’s how we did it:

• First, Bee Market revolutionized its supply chain by adopting an intelligent approach to inventory management.
• Second, it implemented an innovative reporting system that allowed the company to track its performance indicators in real time.
• Third, the retailer started tracking and analyzing the reliability, efficiency, and performance of its suppliers and was immediately able to stop working with dishonest or slow providers.

Bee Market’s formula for automated replenishment is not complicated. Leafio provided the company with an easily integrated and technologically advanced solution that helped their business grow for a reasonable price.

How Leafio affects business performance and key indicators

Leafio is a powerful analytical tool that generates up to 20 types of reports daily. Bee Market has more than 121,000 stock-keeping units (SKUs) in its inventory and 7,000 product categories. Given this amount of activity you can imagine how many reports the company’s managers would have had to write manually, with 90% of their time spent on filling out routine spreadsheets

That was before Bee Market reached out to Leafio for help in automating their supply chain processes. David Jennings, a category manager for the supermarket chain, described Leafio as “absolute magic.”

“All of the inventory I am responsible for is shown on the dashboard. I can track my top-movers, promotional goods, and new inventory all in real-time.
The system generates regular and urgent tasks for me personally, pointing out the areas which require my immediate attention. I no longer have to calculate my excess inventory, turnover rate and leftovers manually,” Jennings said.

Leafio also processes real-time data and generates ABC analysis, performance and supplier reliability reports on a daily, weekly, monthly or quarterly basis. This level of automated replenishment allows Bee Market’s managers to focus on strategy rather than operations, which has helped their company grow.

The agile approach to automating a supply replenishment system

Bee Market dispatches on average 1300 - 1400 orders per day, which is why automatic replenishment is so crucial for the company. Being able to track fluctuating demand, sales, replenishment, etc., is important for any sales business, but especially so for a retailer like Bee Market.

Delayed orders or expired or low-quality goods can ruin your business. That is why creating accurate, efficient and value-driven collaboration with suppliers has to be the primary goal of every retailer. Bee Market can now track, monitor, compare and review all of its supply chain partners thanks to Leafio, putting the company far ahead of its competitors.

Want to apply Bee Market’s success model to your team or business? Then check out the benefits of intelligent inventory systems and read more about successful case studies here.