Automatic replenishment of perishables in grocery retailing: The value of utilizing remaining shelf life information
ISSN: 0007-070X
Article publication date: 7 August 2018
Issue publication date: 30 August 2018
Abstract
Purpose
The purpose of this paper is to investigate the impact of sharing and utilizing remaining shelf life (RSL) information from grocery stores by the use of age-based replenishment policies for perishables.
Design/methodology/approach
The performance is evaluated through a discrete event simulation model, which mirrors a part of one of Norway’s largest grocery retailer and uses their POS data to reflect a realistic demand pattern of 232 stores for one year.
Findings
The findings indicate that a current age-based replenishment policy (EWA policy) provides a significant improvement of 17.7 percent increase in availability for perishables with a shelf life between 4 and 11 days, but suffers from high inventory levels and only reduces waste by 3.4 percent compared to a base stock policy. A proposed adjustment to the EWA policy, EWASS, provides a more balanced performance in the conducted study with a reduction of 10.7 percent waste and 10.3 percent increase in availability by keeping the same average inventory level.
Practical implications
Sharing and utilizing RSL information for replenishment of perishables with a predetermined shelf life between 6 and 11 days can be beneficial, and could enable the replenishment processes to be automated. However, for products with longer shelf life, the benefits slowly diminish.
Originality/value
The study proposes a new age-based replenishment policy which in the conducted study showed a more balanced performance improvement, in both waste and availability, compared with previous replenishment policies.
Keywords
Acknowledgements
The authors gratefully acknowledge the assistance provided by the Norwegian Research Council (NRC) for the financial support of Retail Supply Chain 2020. The authors thank Dan Knudsen for his assistance in model development. Also, the authors thank the participating case company which together with the NRC enabled this study.
Citation
Kiil, K., Hvolby, H.-H., Fraser, K., Dreyer, H. and Strandhagen, J.O. (2018), "Automatic replenishment of perishables in grocery retailing: The value of utilizing remaining shelf life information", British Food Journal, Vol. 120 No. 9, pp. 2033-2046. https://doi.org/10.1108/BFJ-10-2017-0547
Publisher
:Emerald Publishing Limited
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