With the support of advanced statistical techniques and intelligent algorithms, retailers have been able to dramatically reduce the amount of time they spend worrying about replenishing stores. By taking advantage of tools that take into account a broad range of data including historic demand, POS data and current stock levels, retailers can calculate stock requirements for each store with far greater accuracy. The result is structural shelf life optimisation across their entire range.
Take for instance the Dutch retailer, Udea: the retail chain is currently in the process of introducing what the Commercial Director, Jan van den Brink, calls “’autonomous ordering.” Every day, transaction data and stock levels from across all 70 of the chain’s EkoPlaza stores and the distribution centre is analysed with the support of advanced software to automatically calculate orders for the following day. Since starting the project, over half of the stores now receive goods in this way.
As part of this process improvement, the local entrepreneurs who own the franchise stores loose some amount of autonomy. However as Van den Brink explains: “Despite this, there was no resistance. The process we are now trialling ensures that control of the shelf space on the shop floor remains the same: the local managers can still determine which items they want to include in their range. Furthermore, the store manager can now also see what the minimum stock requirements are to ensure the shelves look full and attractive.” As a result, the store managers, including those that are self-employed, are also able to enjoy the benefits of autonomous ordering.
Although many of the managers may have been more accustomed to using a scanner to determine order requirements themselves, this process was often subjected to errors. Van den Brink goes on to add: “Human mistakes are unavoidable. However, with the introduction of this new process, we have seen inventory levels reduce while availability continued to improve. In most stores, the introduction of autonomous ordering has helped increase availability from 94 or 95 percent to 99 percent.”