InsightsSupply takes on demand

The food retail market continues to be dynamic. Stores are now expected to keep longer opening hours, which means that stock replenishment activities are often carried out during busy shopping periods.

In addition, consumers want to have more diversity in selecting their products. This means that deliveries from warehouses are becoming smaller, with replenishment activities performed more frequently.

Rise of the multi-store format

One of the most significant trends affecting food retailers is the growth of the multi-store format. Until recently, the basic template for a store, such as a supermarket, varied only slightly from the time-honoured layout.

However, that traditional approach has since been thrown out by the demands of modern society. Products can now be purchased from a diverse range of outlets. This puts significant constraints on the order-picking process, because the end delivery point must be taken into consideration.

According to a study by IGD: “The physical store will continue to play a significant role in the future of shopping,” but that, “store layouts will require greater differentiation […] counterweighted by the need to maintain an efficient supply chain.”

A pioneering field

Store-friendly deliveries are the ideal solution. This method entails the building of pallets or roll cages in DCs in line with the specific layout of the end store.

These have a positive impact owing to the way stock replenishment and preparation is made as simple as possible. The key advantage is that DCs can precisely build an optimal pallet or roll cage, regardless of a store’s arrangement.

Vanderlande has already defined its proposition in this pioneering field – automated case picking (ACP). This allows us to automate the complete system flow, from receiving supplier pallets through to building mixed case pallets for individual stores.

A pioneering field

Improved shopping experience

One of the crucial components within ACP is our Load Forming Logic (LFL) software, which calculates the most effective pallet build. LFL translates the store order into a number of load carriers, pallets or roll cages.

It takes into account both store and product characteristics, so that the goods are stacked in a stable way. This facilitates easier in-store replenishment.

By building optimal pallets, using LFL also means that there is less need for store operatives to split pallets into smaller sections. This saves time and reduces costs.

As such, the splitting process can not only be improved, but potentially removed altogether. It can also free up valuable shop space, which can be used instead to improve the shopping experience for customers.

Optimised supply chain

The crucial benefit to food retailers of ACP is that their stock can be replenished much sooner. Products can be prepared on pallets in such a way that they fulfil their intrinsic value for consumers – by being available at all times on the shelf.

The financial implications are substantial. Based on an average food retailer with 200 stores, store-friendly deliveries can reduce stock replenishment activities by two to three hours per delivery, per store.

This equates to a saving of up to € 20m over ten years. Transport costs are also reduced, by around € 5m over the same period.

Ultimately, shoppers will face fewer out-of-stock situations, while warehouses benefit from an efficient and flexible operation and reduced transport costs. Increased efficiency on the shop floor will also help food retailers to improve their competitive advantage even further.

Wilco van de Veerdonk
Wilco van de Veerdonk
Executive Programme Manager ACP

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