Академический Документы
Профессиональный Документы
Культура Документы
(Opportunity to Sell)
Opportunity to Sell
Sales
Waste/Shrinkage
$ Value
(Sales
and G.P.)
$ Value
(Sales
and G.P.)
VALUE
Waste
Waste
10 days
5 days
Time
Supply Chain-1
Time
Supply Chain-2
The transition from Supply Chain 1 to Supply Chain 2 shows how a high-velocity supply chain can improve gross profit.
Figure 1
$ Value of
Product
$ value of
Risk/Waste
Sale
Time
In the critical time period between picking at the source, to sale at the retail site, a perishable product loses value
rapidly through product degradation. The supply chain must be responsive in the initial stage and cost-effective in
the latter stage.
Figure 2
Distribution Centers
Vendor
Store
Customer
Transport/Handling
Transport/Handling
= 2 days
= 8 days
Effective Shelf
Life = 6 Days
Min. Fresh
Days Required
= 4 Days
Time
Out of the 20 days of total shelf time, only six are available to sell the product at full margin in-store.
Figure 3
Transport
Producers/Farms
Packers
Processor
Figure 4
Warehouse
Store
2014
3
4
5
6
NVA NVA NVA NVA
M
1
M
2
9
M
10
M
Color Key
11
M
M
12
13 14
NVA M
M M
15
M
16
M
17
18
19
20
21
22
23
24
25
26
M NVA
M
2
M
3
M
3
27
28
29
30
31 Total Days
11
10
6
M
12
NVA
12
1
1
51
M Value Adding
Figure 5
Key
Automation
time.
Implementation
Centralized
Centralized
Organisational Design
An effective organisational design must be guided
by a formal process for integrating people, information and technologies across the enterprise
all focused on meeting key business objectives.
Thus, a design that supports a high-velocity
supply chain must take into account the following:
Supply
High-Velocity
Supply Chain
Organisational Design
Business Process
(Industry Best Practices)
Technology
Enablers
(Best of Breed)
Figure 6
Process
>>Network
>>Single
view of forecast: Sharing the demand forecast and POS data with suppliers
Supply
Chain
Visibility
Vendor Contracts
High Velocity
Supply Chain
Key Drivers
Collaboration
Dynamic Allocation
Demand
Forecasting
Lean Logistics
Figure 7
Procurement
>> Enhanced
>> More visibility into inventory at the distribution center and in the store with the expiration date (less shrink).
Technology Enablers
>> Perishables-specific
>> Future
Automated
SAP (via the SAP for Retail suite) offers procurement capabilities for managing perishables. Buyers can create scenarios for a push/
pull strategy, distribution to stores and vendor
evaluation. The critical needs of buyers are
addressed through SAPs Perishables Procurement Work Centre. This module provides
buyers with the tools and consolidated information they need to manage purchasing\
distribution decisions for perishables across
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business divisions.
The starter pack service for grocery retailing
and meat processing includes unique solutions
from SAP for Retail and SAP Enterprise
Solution Services. It offers a complete
solution based on SAP best practices for retail
packages, supports pre-configured, industryspecific business processes, and offers a
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number of enhancements.
The Oracle Retail Advanced Inventory
Planning system calculates the product/store
level inventory need for perishable products
balancing waste and availability based on
an items shelf life and acceptable loss due to
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waste.
Forecasting
Management
Efficiency
Traceability
Looking Forward
The perishables supply chain is unique in
terms of operations and product characteristics. Retailers looking to develop a worldclass perishables supply network must first
understand the concept of an effective shelf
life (the available days that a product can be
sold without becoming unfit for consumption)
in order to identify the top 20% of items that
contribute to 80% of waste.
It is important to adopt a structured approach
for analyzing and uncovering the root cause
of waste and identifying future initiatives.
Vertical integration, network collaboration
Footnotes
1
The Wall Street Journal, Frozen Foods Grow Cold as Tastes Shift to Fresher Fare, June 26, 2014. http://
online.wsj.com/articles/frozen-foods-grow-cold-as-tastes-shift-to-fresher-fare-1403826097.
Sophie Glabella and Asha Bee Abraham, Food Miles in Australia: A Preliminary Study of Melbourne, Victoria
[Internet], 2008 [cited June 20, 2008]. http://www.ceres.org.au/sites/default/files/CERES_Report_%20
Food_Miles_in_Australia_March08.pdf http://www.ecofriendlyfood.org.au/buy_locally.
Arvind Singh Rana, Old is no Longer Gold - Applying theory of constraints to improve freshness of
products. http://www.vectorconsulting.in/insights/consumer-goods/old_is_gold_no_more.html.
10
Trends in Loss Prevention and Store Operations Control for 2012. http://www.retailcontrol.com/articles/6trends-in-loss-prevention-and-store-operations-control-for-2012/.
11
Bob Engel, 10 Best Practices You Should be Doing Now, Quarter 1, 2011 issue. http://www.supplychainquarterly.com/print/scq201101bestpractices/.
12
Ibid.
13
Taking advantage of the Organic Supply Chain, Australian Organic Spring 2013 | Issue No.1.
14
Corporate Responsibility Review 2011/12 - Food with thought, Wm Morrison Supermarkets PLC http://your.
morrisons.com/Documents/Morrisons_CR_Review_5MB.pdf.
15
Emerging Trends in US Logistics Part II: Food Safety TrendsFood chain Intelligence. http://www.food-chain.
com.au/Dispatch3.pdf.
16
17
Reducing the Bullwhip Effect via Market Research-Gleaned Insights, Cognizant. http://www.cognizant.com/
InsightsWhitepapers/Reducing-the-Bullwhip-Effect-via-Market-Research-Gleaned-Insights.pdf.
18
19
Powering Growth Through Direct Store Delivery, Sept., 2008. Grocery Manufacturers Association (GMA).
http://www.gmaonline.org/downloads/research-and-reports/DSD_Final_111108.pdf.
Nestles DSD Model Opens New Retail Channels. http://www.dairyfoods.com/articles/87925-nestles-dsdmodel-opens-new-retail-channels.
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10
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23
Real Results Magazine, Volume 8, Issue 2. 2013 JDA Software Group, Inc. jda.com/realresultsmagazine.
SAP for Retail: Help. http://help.sap.com/saphelp_46c/helpdata/en/ae/59637806ba11d3ae06080009d22
32d/content.htm http://wiki.scn.sap.com/wiki/display/Retail/Perishables+Procurement.
24
SAP Solution Brief. Plan, Deploy, and Optimize Retail Software Faster and Easier Than Ever. http://www.
sap.com/bin/sapcom/en_us/downloadasset.2012-11-nov-30-08.plan-deploy-and-optimize-retail-softwarefaster-and-easier-than-ever-pdf.html.
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About Cognizant
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