Dive Brief:
- Retail software provider Blue Yonder has developed a machine learning-based system that enables grocery retailers to optimize their fresh produce replenishment decisions and processes, FoodBev Media reported.
- The machine-learning software automates produce replenishment decisions based on data analysis and simultaneously optimizes demand and KPIs. Retailers can then "align category plans to daily trading decisions and close the gap between trading and the supply chain," according to FoodBev Media.
- With high consumer demand for fresh foods, such technological developments are critical, but the cost of supply management can eat into retailers' profitability.
Dive Insight:
With automated produce replenishment decisions, retailers can focus on how best to utilize the produce they have on hand, like putting certain items on sale near the end of their shelf life. Before, retailers would often have to guess whether they should order more of a certain product at a particular time and risk buying more or less than they needed.
Automating produce replenishment decisions may also impact retailers' level of food waste, which the food industry as a whole, including retailers, manufacturers and restaurants, has worked to combat in recent years. Retailers like Whole Foods and Wal-Mart have begun selling "ugly produce," or produce that is safe to eat but has cosmetic defects and might otherwise be thrown out, to combat this issue. Automation software offers retailers more options for optimizing their fresh produce stock.
Reducing food waste isn't just better for the environment, it's also a sound business decision. Food waste comes at a cost to the retailer, which has to absorb the cost of the lost product and invest in a way to dispose of the wasted products.