Ordering Just What’s Needed: Automated Goods Procurement in the Retail Food Industry

Predictice Analytics helps to reduce waste Predictice Analytics helps to reduce waste

According to the Food and Agriculture Organization of the United Nations (FAO), the population in the Near East is set to grow from its current level of 380 million to 520 million by the year 2030. In order to feed this growing number, curtailing the amount of food loss is imperative. Just looking at grain alone, around 16 million tons are lost in this region every single year. And for perishable foods, this figure is more than 30 percent. Improving the options available for storing and cooling goods adequately can help to remedy this situation.

The challenge for the retail food industry
Thanks to “food-friendlier” climatic conditions and an outstanding infrastructure, losses in the retail food industry in Germany are comparatively low. Approximately 550,000 tons or just 5% of food waste is generated by the retail food industry. In our whitepaper entitled “Automated Goods Procurement in the Retail Food Industry”, we reveal how demanding it is to plan correctly. After all, ultimately it is just as much about avoiding out-of-stock situations as preventing write-offs caused by drastic price discounts or even disposing of foods that can no longer be sold.

Countless factors for accurate forecasts
We believe the solution lies in automated goods procurement. Using an accurate sales forecast as a basis, performed across the entire range of products at individual article level, it is possible to generate purchase order proposals automatically. In so doing, our forecast software (predictive analytics) aimed at huge volumes of data (Big Data) factors in every piece of data gained from internal systems, as well as any relevant external factors of influence. That’s an awful lot of data:

  • Sales
  • Level of stock
  • Opening times
  • Promotional campaigns
  • Weather forecasts
  • Event calendar
  • and far more

Eat it up: don’t throw it away!
Automated goods procurement enables the retail food industry to increase its sales universally – and to reduce the amount of food it “writes off” for good straight into the garbage. But there’s something we can all do to help right now. The current German Federal initiative “Too good for the garbage” allows us to see exactly what we are doing: We all buy more than we actually need, and we “dispose” of food that is in fact still edible.  The publication LE MONDE diplomatique has devoted an entire issue in magazine format to the topic “World Food Affairs in the 21st Century”. One of the authors suggests simply “eat it up: don’t throw it away.”

Increase sales across the boards, reduce write-offs
We shouldn’t, therefore, only turn to the retail food industry as we look to lose this tag we have of being a throwaway society. Blue Yonder helps the industry create a “bill of fare” that suits customers’ tastes. You can get a first impression of how this works in this presentation on Slideshare. Here you will learn how predictive analytics can be used for automated procurement in the retail food industry. At our industry conference in June, this topic generated a lot of discussion. We will show you a few video statements about this in the coming weeks.

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We enable retailers, consumer products and other companies to take a transformative approach to their core processes, automating complex decisions that deliver higher profits and customer value using artificial intelligence (AI).