Automated replenishment system in next door grocery

January 29, 2020 5 min

Julie Moravej, Business consultant

Retail sector is an intense, dynamic and highly-competitive organism. Consumers today are over-demanding and their expectations are high. Consumer appetites are growing, people want to get healthy food for a reasonable price anywhere at any time they want. Retailers have to keep up with a changing consumer behaviour, and at the same time react to a challenges of a booming food retail market and new players, online and offline, which continue to enter retail landscape.

In a quest for development and business growth food retailers have to quickly respond to customer demand and adapt to the market. In a consumer-driven business, you have to make your supply chain work like a clockwork, keeping shelves stocked and customers happy.

Ultra-dynamic and fast-growing market has its pros and cons, it’s a two-sided medal. An extreme level of competitiveness is one of the risks: once you can not satisfy your client either by out-of-stocks or low quality, damaged goods, he will never return. He will simply choose your closest competitor.

How to be successful and keep up with the requirements of a growing market?

Bee Market, a network of the so-called “next door” groceries has 24 stores located in a capital city and its suburbs have a great consumer traffic, but at the same time, it is the most competitive region in the whole country. In order to be on top retailers require a degree of creativity, innovation and ambition.

Within less than a year (September 2018 to April 2019) Bee Market managed to open 3 new stores, ambitiously increased its turnover rate by 8% and the sales by 7%. At the same time the company kept its personnel level flat and the level of supply chain automation reached 80! percent.

Here are some secrets of their success:

  • First, Bee Market revolutionized the functioning of its supply chain with the help of intelligent approach to inventory management.
  • Second, Bee Market integrated an innovative reporting system which allowed them to track their performance indicators in real-time.
  • Third, the retailer started tracking and analyzing the reliability, efficiency and performance of its suppliers, which brought them quick results - they immediately stopped working with dishonest or slow providers.

Bee Market success formula is not complicated, they found an easily-integrated and efficient technologically-advanced solution that offered them all these superpowers for a reasonable price. ABM Inventory is an automated software that was quickly integrated into all retailer’s existing processes and systems.

Let’s have a glimpse into the advantages of a renewed agile supply chain of Bee Market:

Clear view on business performance and key indicators

ABM Inventory is a very powerful analytical tool that generates up to 20 types of reports daily. Bee Market has more than 121,000 SKUs in its inventory and 7,000 product categories - imagine the tremendous volume of reports managers had to produce manually, wasting 90% of their time and efforts on routine spreadsheets filing.

Each product and each SKU have their own sales cycle and history. Consumer demand is a very unstable indicator, which responds to consumer mood fluctuations and seasonal factors.

Just imagine these piles of data and reports which were meant to be an intelligent solution for strategy shaping, however, in reality, it was nothing more than a mess of wastepapers.

“Absolute magic! This was my first reaction when I turned on my laptop and started using ABM Inventory for the first time”, says one of Bee Market category managers. “All inventory I am responsible for is shown on the dashboard, I can track my top-movers, promotional goods, and new inventory in real-time. But what’s even more amusing, 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. Magic, pure magic.”

ABM Inventory can also process real-time data and generate ABC analysis, performance and supplier reliability reports on a daily, weekly, monthly or quarterly basis. No need to say, automating manual tasks has freed up Bee Market’s managers for more sophisticated strategic development tasks. And also there is no need to hire more people to satisfy the needs of a growing company.

Agile approach to automating supply replenishment system

Automatic. Replenishment. These words make a dream of each retailer. Automated reordering solution can track fluctuating demand, monitor sales, propose replenishment options and send the orders to your suppliers. This is the ideal model of a retail supply chain based on cutting-edge solutions and cost-effectiveness.

Bee Market usually sends 1300 - 1400 orders per day. With the integration of automatic replenishment, company no longer has to spend a lot of money on personnel salaries, fixing human errors, or rely their business on intuition-based forecasts. The system works non-stop, tracks demand and sales in real-time and relies its replenishment quantities and terms on proven inventory management techniques.

Reliability control

Bee Market started to more closely control and review the reliability of their suppliers, as they have integrated quality control offered by ABM Inventory.

In food retail, your supplier is your main partner and your friend. You create value and you make your customer journey satisfying together. On the contrary, delayed orders, expired or low-quality goods can literally ruin your businesses. That is why creating accurate, efficient and value-driven collaboration with suppliers is a primary goal of each retailer.

Bee Market turned this idea into reality by forming a database of all suppliers they work with, integrated the database into the accounting and inventory management system and voila, the company can track, monitor, compare and review all supply chain partners. The company goes ahead of its competitors by having careful monitoring of each supplier’s accuracy and predictive scenarios for potential risks (delays, force majeure etc).

You can also feel the benefits of intelligent inventory systems or read more success stories here.

Success story of a next-door grocery network which managed to achieve qualitative and quantitative business growth, increase sales and turnover at the same time offering their clients a great shopping experience, good market prices and fresh quality foods.

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