Grocery replenishment driven by ‘gut feel’

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Almost half of UK grocery retail directors say replenishment is still driven by gut feel, according to research by Blue Yonder, which supplies predictive applications of retail.

It said that interviews with 750 grocery managers and directors in the USA, UK, Germany and France, showed that despite a rise in accurate machine learning algorithms for automated replenishment and demand planning, 46 per cent of surveyed directors in the UK say replenishment is still an entirely manual process.

Some 85 per cent of respondents identified automation as a key tool for making the fast decisions needed to meet customer demand. The research also identified that 31 per cent of directors in the UK feel there are now too many decisions to be made manually, with the same number stating that gut feel is slowing them down.

The research also found that 62 per cent of UK directors say they have invested in replenishment optimisation in the last two years; 31 per cent say they will be investing further in replenishment optimisation in the next two years.

Some 46 per cent of directors said that replenishment is a manual process and a further 46 per cent say that although the process is automated it can be overridden by managers, suggesting a reluctance to rely on automation.

Additionally, while 90 per cent of directors say that they are delivering on product availability, nearly 25 per cent of UK grocery directors do not feel they are delivering in terms of quality, fresh produce highlighting a disconnect in replenishment strategies.

Professor Michael Feindt, founder of Blue Yonder, said: “With increasing customer demand for immediate availability on all products, grocery retailers need the marginal gains that machine learning algorithms and automation can offer in delivering the best decisions on a daily basis for their replenishment strategies.”

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