The grocery business by all accounts happens to be one of the largest businesses out there. And, it has evolved as a business by catering to the emerging needs of the consumer. This process of evolution would not have been possible without effective supply chain management.
Even into the future, consumer demands are going to dictate how retail supply chains operate and adapt in accordance with market conditions. Presently, the grocery food business is closely aligned to cost-conscious aspirations of the consumer. This is primarily influenced by the greater access to information, the ability to compare prices among retailers and promotional offers. This compels grocery retailers to operate supply chains in a manner that allows keeping costs low yet delivering high value for money.
Consumers today look for innovation and features in products as well as a fulfilling shopping experience. The expectation is that shopping has to be easier, faster and possibly interesting.
Your Retail Coach (YRC) comes with the necessary expertise and experience for helping clients adapt to the future needs of the grocery business with the right dose of technology to make all such businesses future-ready.
Emerging Supply Chain Technologies to Fulfil Consumer Demands
In the last part, we have spelt out that consumer demands are evolving. This means supermarket brands that will catch up quick and align themselves to the consumer needs and requirements are likely to be preferred. Let’s look at emerging technologies that are likely to play a part:
Radio Frequency Identification (RFID):
It permits products to be incorporated with tags that contain a simple circuit and an antenna. An RFID reader can then be used to identify products through electromagnetic radio waves without the need to be in the line of sight. This technology has grown enough to be accommodated into a low-priced goods’ environment.
Internet of Things (IoT):
This refers to the system of interconnected and interrelated objects and devices that are able to connect and transfer data over a wireless network without human intervention. This is an evolving technology that would be especially useful in reducing the dependence on human involvement in areas like warehousing.
Cyber-Physical Systems (CPS):
These are integrations of computation, networking and physical processes. This involves advanced connectivity that allows real-time acquisition of data from the physical world and information feedback from cyberspace. This gives rise to feedback loops wherein physical processes affect computations and vice versa.
Big Data Analytics:
The term ‘Big Data’ pertains to large sets of data where the usual data processing applications are rendered ineffective. It mainly refers to extracting value from data through predictive and behavioural analytics and is mainly used in strategic and tactical decision-making.
This technology enables computers to learn without being explicitly programmed. It allows automated or assisted decisions making based data collected by sensors. It can be used for large scale decision-making like resource allocation.
Grocery Retail Supply Chain Planning
Grocery retail planning encompasses different stages and largely consists of flow of goods through – Procurement, Warehousing, Distribution and Sales. These planning stages can be again grouped into long, mid and short term tasks.
- Long-term Planning: Follows the overall configuration of the infrastructure such as procurement logistics, warehouse design, distribution and outlet planning.
- Mid-term Planning: This will have a time span of 6-12 months and mainly consists of product segmentation, distribution and in-store planning for sales.
- Short-term Planning: These are mainly activities before execution like planning and scheduling for order, transport and in-store fulfilment on a daily or weekly basis.<
Specific Stages of Grocery Retail Supply Chain Planning
Here the focus is about explaining the effect of technology in planning of particular activities within each stage of grocery retail namely:
- Technology will impact sourcing strategy and it will easier to keep a track on a supplier based on their performance on parameters such as cost, quality, availability, innovativeness, and environmental impact.
- Big data analytics will play a vital role in selecting a supplier based on past and expected performance coupled with market information.
- Product segmentation and allocation according to order patterns will be more effective. The gist being – the right product in the correct amount will be at the right location at the correct time.
- Technology will allow suppliers to have access to information on Point of Sale (POS) data and inventory status allowing better promotion planning.
- The number, location, type and function of warehouses will be affected by increased decision support offered by technologies.
- At the operational level IoT, CPS, AR and RFID will provide visualization of indoor positioning all products, machines and humans. For instance, mobile robots and humans will receive ideal routes and other instructions for inbound and outbound order picking to improve product handling.
- Capacity planning can be improved by accurately planning requirements for personnel and machines and even shifts based on utilization and efficiency data.
- Technology will remodel the distribution structure by optimizing the frequency of deliveries, route plans, and the amount to be delivered.
- Quality of perishables during distribution would be monitored by a combination of RFID and wireless sensor networks that would involve temperature control.
- The pressure on inbound logistics will be lessened due to the automation of inbound logistics which will allow seamless information flow about incoming goods.
- By combining CPS, IoT and RFID at retail stores, there is scope for automated shelf management and the possibility for unmanned stores that will function with minimal human intervention.
- Manual stock counting practices could be eliminated to be replaced by IoT based architecture allowing precise status of on-shelf availability.
- A combination of historical sales data along with market-related information would be analyzed by big data analytics with different metrics and machine learning to enable effective assortment and promotion planning.
- Technologies mentioned in the write-up will allow profiling of consumers based on their demand patterns to be targeted with personalized advertisements and promotions.
- At the strategic level, location of stores can be planned according to customer profiles, aggregated sales data and advanced forecasting.
The grocery business is changing mainly on account of evolving consumer preferences and demands. Supply chain the critical component in the grocery business is seen as the domain with massive scope for technology intervention. Fortunately, technology is keeping pace with the emerging demands of the consumer.
Technologies like IoT, RFID, CPS, Big data Analytics and Machine Learning all are getting integrated into the supply chain strategy governing the grocery business. It is bringing about optimization, automation, reduced wastage, monitoring possibilities and transparency. Such technologies have the potential to enhance decision support and provide more automated decision making.
At Your Retail Coach (YRC), we come with the necessary experience in conceptualizing, strategizing, and implementing both physical and online grocery stores. Our consulting and advisory services have helped many business owners and brands in improving their retail offline & online services. We also have been instrumental in setting grocery stores (physical stores & dark stores) from scratch helping owners with the necessary inputs and resources.