Automatic replenishment of perishables in grocery retailing: The value of utilizing remaining shelf life information. Issue 9 (3rd September 2018)

• Record Type: Journal Article
• Authors: Kiil, Kasper; Hvolby, Hans-Henrik; Fraser, Kym; Dreyer, Heidi; Strandhagen, Jan Ola
• Is Part Of: British food journal. Volume 120:Issue 9(2018)
• Page Start: 2033
• Page End: 2046
• Publication Date: 2018-09-03
• Subjects: Information sharing -- Simulation -- Shelf life -- Replenishment; Food industry and trade -- Periodicals; Food -- Marketing -- Periodicals; Food adulteration and inspection -- Periodicals; Food -- Periodicals; 381.456413
• DOI: 10.1108/BFJ-10-2017-0547
• Languages: English
• ISSNs: 0007-070X

Abstract

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.