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Improving the accuracy and the flow of data to and from its suppliers has helped Hannaford Brothers greatly improve in-stock positions at its retail grocery stores, while reducing inventory overall.
"We have found that the more information we can share with our partners, the more costs we are able to drive out of the system, so we both gain," says Scott Craig, director of replenishment for Hannaford Brothers, whose parent company, Delhaize America, owns a number of regional supermarkets in addition to Hannaford, including Food Lion, SweetBay and Bloom.
After trying to develop data-sharing processes in house, Hannaford Bros. opted for outsourcing. "It was a lot more complicated and more involved than we had anticipated," Webb says." With 60,000 SKUs and 4,000 vendors, sharing data every day was a huge undertaking." The company opted to outsource the process to a third party. "The results have been fantastic," says Webb. "Data flows daily to our suppliers so they can look at our point-of-sale and inventory data every day. This drives much better decisions because we are looking at the business almost in real time."
One example of how Hannaford uses this data is to make determinations on what products are in danger of going out of stock by running algorithms that look at expected demand. "Now we are beginning to use this analysis as an order sensing program for our VMI vendors, so they can better understand our forecasted demand going forward," he says.
Data sharing also helps with post-promotion evaluations. "We have driven value and reduced reclaim by going into store-level inventories after promotions to determine the right amount of product to be sending for future promotions," he says.
"We have seen some fantastic results regarding in-stock positions and also reduced inventory overall, which means that consumers are getting fresher produce at a lower overall cost," Webb says.
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