By Joachim Pinhammer - Senior Retail Technology Analyst - Planet Retail
Inconsistent shopping patterns make predicting customer demand and having the right products available at the right place and at the right time a permanent challenge for retailers and their suppliers. Excess inventory levels reduce cash flow and gross profit margin. At this year’s ECR Europe Conference in Brussels, one of its workgroups presented a new trial programme which is aiming to tackle the problem in a collaborative way.
Under the umbrella of the ECR Europe Supply Chain Committee, 15 renowned companies such as Metro Group, Walmart’s Asda, Carrefour and Sainsbury’s from the retail side as well as Unilever, Kraft Food, Nestlé, Colgate-Palmolive, Henkel, L’Oreal and Barilla from the supplier side have jointly developed a new collaborative inventory optimisation approach, which aims to maintain speed to shelf and high availability rates as well as keeping inventory to a minimum.
A new collaborative approach
Previous initiatives suffered from the fact that, too often, retailers were not willing to open their books and share information on their logistics costs. The new approach is based on transparency of transport, handling, inventory and administration costs, in a bid to collaboratively find the best method of delivery and the best strategy for implementation across company borders.