Global retrail
Automated Replenishment System in Grocery
Global retrail

Automated Replenishment System in Grocery

6 min read
Irina Shypulia
Irina ShypuliaProject Manager
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 in the United States back in the 1980s, and the author of the program was Procter & Gamble. 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:

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, 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, to quickly respond to all changes.

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

One of the most valuable functions of such software is the automatic generation of most of the 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 trading processes. But all functions are aimed at optimizing inventory management. There should not be any excess or missing inventories in the warehouse, the consumer should receive the goods of interest or actual goods on time - the fulfillment of these requirements is ensured by an automated replenishment system.

How it works:

At the same time, there is no need to manually fill in reports and form orders, which allows you to save up to 90% of the time of managers. Therefore, an auto replenishment system is an optimal solution for retail chains, regardless of their specifics.

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 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 kept its personnel level at the same level, and crucially, its supply chain automation reached 80%.

Here’s how we did it:

Bee Market’s formula for automated replenishment is not complicated, the company found an easily integrated and technologically advanced solution that offered them the aforementioned business superpowers for a reasonable price. This was Leafio.

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 routine spreadsheet filing.

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 allowed Bee Market’s managers to focus on strategy rather than operations, allowing them to focus on growing their company.

The agile approach to automating 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, 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, meaning the company is far ahead of its competitors.

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

Irina Shypulia
Irina ShypuliaProject Manager

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