Fresh products are in the demand today. Supply chain has the responsibility to deliver super fresh products to benefit both consumers and the organization.
Consumers being more aware and educated and with preference to shop at Modern Trade stores, scenario is very different today from what it used to be in earlier times. In Kirana stores, consumers used to take whatever is provided by the shopkeeper but today shopper has the liberty to look, touch, feel the product and make the decision.
In food category, best before date has become all the more important. Smart shoppers generally pick the last product in the row assuming retailer want to follow First Expiry First Out (FEFO).
They are forever looking for a fresh product. A fresh product provides the guarantee of quality that consumer can trust.
Sharing 5 tips which supply chain need to follow to deliver the promise of freshness to its customers and consumers.
Organization to optimize internal product fill rates. It will provide better freshness on shelf to enable better taste and experience to consumer. With consumer spoilt for choices and every company want to increase wallet share, bigger risk will be aged product on the shelf than stock out in the pipeline.
unctions should be ready to forego their individual interest in favour of achieving larger goal for the organization .Collaborative working to be a norm instead of silo functioning. For example, sales and supply chain functions should be aligned to reduce inventories at Distribution centres and distributors to increase stock rotation and deliver fresh products
3. Auto refresh Data, System and processes:
Planning and Ordering data to work in auto refresh mode on daily basis. It will ensure right customer demand is updated in the system. Supplies are serviced accordingly avoiding production shortage or ageing. Faster the stock replenishment, better will be fresh products delivery.
Only reliable supply chains could deliver fresh product. It requires lean, just in time and highly disciplined supply chains offering fresh product in right quantity at right place at right time all the time. Reliable supply chains can be build by ensuring systems and standard operating procedures to maintain consistency in supply chain.
Supply chain need to deliver the product much faster and more efficiently from source to destination
5. Focus on Big picture of fresh products:
In case of supply issue, sales should be ready to forego primary sales plan and refill the pipeline next month. Internal pipeline stocked out is a loss which can be recovered with next replenishment.
Decision-making will be a key differentiation in adopting different approach. Discouraging inventories build up at every node of supply chain will lead to further supply chain optimization
Driving Supply chain delivering fresh products to consumers in supply chain has many benefits. It improves the consumer taste and experience thereby increasing consumption and building brand loyalty.
Reduces cost of distribution, market returns, bad goods and obsolescence. More cash is available for Management to take better investment decisions. Return on investment improves for organization, distributor and retailer through faster turnaround of inventory.
Sharing a real life example on fresh products delivery from my experience.
We were importing some finished goods and selling in India market. During my one of the visit to distributors, he asked for 1+1 free scheme. I asked why.
He replied that stocks is old and nearing expiry. I said it came recently. He insisted on the scheme which meant 50% discount although we were not making much money on the product. I realized it meant that we are storing more product and it is not selling well.
I made a proposal to management that we need to cut the entire safety stock and keep only cycle stock in low shelf life products so that distributors carry low stocks which improve their Return on investment and consumers get fresh products. There was lot of challenge specially from sales because it means we cannot sell more than the plan.
I said today we are losing money on this product and tomorrow we may not sell much volume but we will earn money. Sales will improve with fresh products delivery and then demand plan can be increased. After some tough discussions, finally management team aligned to the proposal and over a period of time we sold as per plan and with improve in product freshness there was increase in consumer demand
Icing on the cake was when CEO visited the market and distributors appreciated for significantly improving product freshness, increasing stock rotation, return on investment and delighting the consumers
Deliver fresh products to your customers and consumers and you will be amazed at the benefits it brings in revenue, profitability and overall efficiency of the organization