Imagine you own a retail store, a bakery and a deli that sells baked goods, fresh seafood, poultry, and meat. Your food is good quality, but you sell more on some days and less on other days. The problem is, you have not perfected the skill of predicting how high the demand will be for your fresh goods.
If the store produces too little you have a shortage, if they produce too much you have a surplus. The obvious answer might be to make less food, but this strategy is flawed because you risk shortages. As we know, shortages mean you left money on the table and could have brought in more revenue that day.
What about surplus? As one might imagine, freshly made food does not last very long. This means that the extra goods have a very short span of time to be sold and consumed. No one wants stale bread or less-than-fresh meat.
Customers come to retail stores because they trust that the store will have what they want and need. Without accurate demand predictions, you lose the trust of your customers.
How SAP Leonardo for Retail Can Help
SAP is co-innovating with customers to address this exact industry scenario. The company has developed the industry innovation kit for Retail, zero waste option, for SAP Leonardo. The idea is to minimize waste and to maximize margin; translation: save food and make more money. The industry innovation kit helps do this by providing an accurate forecast demand for perishable goods and an automated daily instructions list.
Oliver Grob, retail solution manager at SAP, explained, “We have even built a mobile application for this, so the people working in the store or the bakery can use a smart phone or a tablet to record the current inventory.”
Because SAP Leonardo for Retail, zero waste option, is connected to the SAP Cloud, everyone can immediately know how much food needs to be made and how much inventory needs to be thrown out. With this simple and automated form of communication, money can be saved daily from minimized use of resources and minimal spoilage. In addition, customers can trust that the retail stores will have what they want, when they want it.
Furthermore, the zero waste option also helps when making plans. Based on what it has learned about the demand trends in your store, it can generate a list of ingredients and materials to replenish what has been used. With this extensive data gathered through machine learning and analytics, managers can make informed predictions and plans.
Leading Example Proves Out the Concept
SAP Leonardo for Retail, zero waste option, has already been proven with an SAP customer. You too could benefit from more accurate demand forecasting for perishable goods. You can start eliminating waste and saving money soon.
The kit offers a better understanding of inventory and demand of perishable products and is an important and convenient way to communicate information among employees. The knowledge can be used to help lower waste, whether that means minimizing spoiled food or unnecessary use of resources.
Eliminating waste saves money. It can also improve the business-to-consumer relationship. By becoming more knowledgeable about the demand, a retail store can gain trust. And when customers trust your brand, they’ll keep coming back for more.
