Morrisons, a chain of supermarkets in the U.K., has partnered with Blue Yonder to optimize replenishment and automate the order of 26,000 products in all of its 491 stores. So far, the ordering system has reduced shelf gaps by up to 30%.
Using the Blue Yonder Replenishment Optimization technology, the platform analyzes sales data from Morrisons and combines it with external data, such as weather and holidays, to predict the level of demand for a particular product at a particular location. The system uses highly scalable cloud technology and machine learning in order to harness the vast amount of data.
The system first launched in specific Morrisons locations in 2016 and now makes more than 13 million ordering decisions per day.
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Success for retailers relies on having the right product for sale to a shopper, in the place where they expect it and at the time they want to buy it. According to Alex Siskos, president of Blue Yonder, North America, this may sound simple, but it's a complex process affected by many independent factors including suppliers, retailers, warehouses and stores. Ensuring optimal availability, through shelf gap relief programs such as this one, is important to everyone in the industry.
Blue Yonder first started working with Morrisons at the end of 2015 when the company wanted to improve its supply chain and replenishment process in order to raise customer satisfaction. Blue Yonder uses demand data for every store and external factors to automate ordering.
Beyond the 30% reduction in shelf gaps, stock holding and back stock levels at Morrisons have also been reduced.
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Now the replenishment process is more than 99% automated at Morrisons, maintaining accurate and consistent orders to meet the retailer's strategic goals. As a software as a service solution, it is capital-light and easily deployed via the cloud to respond to changes in customer demand. This saves time in-store that was previously given to manual daily ordering, freeing up staff to focus on delivering a better customer service in the store.
"To deliver the best customer experience, while also turning a profit, it is vitally important for grocery retailers to optimize on-shelf availability and get their replenishment right. Best-in-class grocery and fashion retailers are using machine learning and advanced analytics to create an adaptive, intelligent supply chain that helps remove the uncertainty, risk and complexity of demand planning, pricing and replenishment to deliver impressive returns and deliver the best customer experiences," Siskos said.