If you are a business which handles food items which are highly perishable, then their is a high chance that your cash flow may be severely hampered by “hidden” food costs such as food waste, spoilage, overstocking, and theft. A third or so of the food produced for human use is wasted yearly, which amounts to 1.3 billion tonnes of perfectly edible food.
The situation is much more challenging for food & groecery retailers. Customers, expect to see a large volume and diverse assortment of products on the shelves of supermarkets & food outlets, otherwise, they will lose out to a rival. In order to do so retailers usually overstock thier inventory with absolutely anything and everything a customer might want.
However, recently retailers are becoming more and more aware of the realities of food waste and how their overstocking strategy is leading to food waste & thus aggravating the cost. With the aid of demand forecasting software you can effectively identify & reduce such food waste costs.
Here are just a handful of ways by which good demand forecasting software can help reduce food waste:
1. Boost the Agility and Transparency of Your Supply Chain
The problem of food waste affects every step of the supply chain, from the farm to the consumer. A good demand forecasting software can offer more flexibility with delivery and last-minute order modifications, improved communication and coordination between retailers and suppliers. All of this will undoubtedly result in a decrease in food waste that retailers produce.
For instance, a store may discover that its candy bars are selling out too quickly, but the fresh produce is simply standing still. If they have a solid working connection with their supplier, they can change their order on a real time basis to avoid having those candy bars go bad by delivering them to another store in their place.
2. Maintain Accurate Stock With Demand Forecasting
Your stock control and inventory management can be optimized by using demand forecasting software. You can analyze and anticipate demand, manage your inventory, and always carry the right amount of stock by integrating predictive analytics with demand forecasting tools.
In other words, you can prevent issues like stockouts and overstocking, which can be expensive for your business, by being aware of how demand varies. Your inventory turnover rates will probably increase due to always keeping the right product on hand, and any associated carrying costs will go down.
3. Increase the Effectiveness of the Supply Chain
You must be aware of and adept at estimating product demand if you want to ensure efficiency among your manufacturers, suppliers, and company. A good demand forecasting software can help you plan manufacturing, warehousing, and shipment more efficiently. You can get real time insights into when the demand for a certain product will decrease and stop stocking it to prevent overstocking & spoilage.
Additionally, if markets are turbulent or an item’s demand pattern is irregular, you’ll need to reevaluate your forecasts more regularly than in slow markets or for slow-moving products. An efficient demand forecasting software can allow you to drill down the demand to even on a weekly bais. By doing this, food waste and overstocking are reduced. If there are supply shortages or instances of surplus stock, you can adjust the forecasting intervals.
4. Improves Supplier Relationships
A company requires suppliers to provide resources for the products or services it sells, as well as resources to manage the company. By maintaining detailed information about your suppliers you can reduce the cost of goods and services, improve quality, and increase innovation.
Businesses should thus ensure transparency in the flow of critical information such as demand pattterns, replenishment plans, demand estimates etc to meet demand accurately. For this, they should utilize a reliable demand forecasting software that can help to collaborate and ensure reports are easily shared across. When the inventory is stocked in accordance with the demand, there is no scope for overstocking, due to which there is no food wastage.
5. Automated Replenishment
Automating replenishment plans are effective as it aids in stocking multiple warehouses optimally without any mannual intervention. Businesses should focus on automating replenishment while maximizing revenue while maintaining high availability and minimizing wastage. Demand forecasting software considers existing inventory levels, truckload optimization, and the number of replenishment cycles for stores before creating plans. Plans can be produced in just a few clicks with real-time inventory data..
Incentivise the products
A purposeful marketing strategy devised through proper demand planning and forecasting can offer discounts on out-of-date goods to consumers and can result in a win-win situation. In-store promotions can be linked with your stock management systems to make sure perishable goods are sold before they go bad.
About the Company
Fountain9 assists companies with maintaining optimal amounts of inventory. Their AI-powered demand forecasting software – Kronoscope, takes various demand-influencing factors into account, allowing companies to successfully and promptly satisfy client demand. Stock waste is decreased, and overstocking and understocking situations are avoided.
The demand forecasting software combines predicted quantities, shelf-life inventory levels, vendor restrictions (lead times, fill rates, MOQs), dynamically altering safety stock levels, and recommended purchase order amounts. All of this is taken care of with just two clicks, and any ordering system can be integrated completely.