But have grocers done enough so far?
“Many retailers have focused on improving imperatives
such as accurate inventory visibility, cross-channel master
data and consistent use of product descriptions and attributes, as well as reducing labor costs, distribution methods, procurement and collaboration,” says Babs Ryan, global
growth consultant for Thought Works, a Chicago-based
The basics are covered, but observers say most of the
innovations that will optimize the grocery supply chain
in the future will come about because of digital transformation. For example, two obvious areas ready for innovation are the Internet of Things (Io T) and analytics, both
of which have the potential to be adopted quickly as more
retailers and manufacturers reap the benefits from these
“The revolution has just begun and there is a long way
to go to fully exploit the potential of digital innovations,”
says Girish Dhaneshwar, assistant vice president, products
and resources for Teaneck, N.J.-based Cognizant Business
Some observers say that innovation will need to focus on
efficiency and risk reduction, and that efficiency innovation will be driven by the ability to improve visibility across
the supply chain in terms of elements like a more detailed
understanding of inventory status.
“That means knowing details such as where the con-
tainer is on a vehicle or on a shelf,” says Oliver Guy, global
industry director, retail for Software AG North America,
“For these reasons, Io T has a lot of promise in the years
to come,” he adds. “While it will start at the container level,
it will eventually move to individual item-level tagging to
enable all of this. This innovation will have massive implica-
tions for the grocery supply chain.”
Many say that Io T-enabled solutions will mature in the
coming years. As it does it will improve visibility into prod-
uct status and lead to improved food safety, optimized
ordering and fulfillment, and enhanced labor efficiency.
“At the same time,” says Randy Burt, a partner at A. T.
Kearney, a global management consulting firm with U.S.
offices in Chicago, “robotics will mature—both in ware-
houses and in-store—and will increase task accuracy while
reducing labor costs. Finally, increased information sharing
across trading partners will accelerate to enable collabora-
tion that improves service levels while lowering costs.”
Fabio Freitas, a strategic consultant for food and consum-
ables at PROS, a Houston-based revenue and profit realiza-
tion company, says that machine learning, artificial intelli-
gence and cognitive algorithms are playing an increasingly
important role in helping companies compete. He adds that
the Amazon experience and the expectations of immedi-
ate responses in the buying process are bringing B2C expe-
riences to the B2B world of modern commerce. “It’s why
companies that don’t move to provide their customers with
frictionless interactions will be left behind,” he says.
Another warning comes from Ryan: “Grocers that do not
continually iterate significant innovations that are linked to
consumer trends and have flexible digital platforms or have
custom developers who can rapidly differentiate and deploy
will get eaten alive.”
Warnings aside, most observers say that food retail is
now on the front end of digital disruption, which will force
integration of store and e-commerce supply chains and justify investments in distribution and logistics to improve
speed, efficiency and effectiveness. Technology enabling key
functions—including forecasting, replenishment, inventory management, supplier collaboration and PO management—in many grocery supply chains is more than 10 years
old, and overdue for reinvestment.
“Food retailers must get the basics of supply chain execu-
tion—logistics, capacity, inventory management, warehouse
operations—to take advantage of emerging supply chain
innovation,” says Burt.
In the coming years, he says, Io T-enabled solutions will