“These disparities that often exist between stores as well as distribution centers already make it difficult to accurately forecast demand and plan for replenishment,” said Pratik Soni, CEO at Omnichain, a supply chain solutions provider. “They also make it hard to align on important aspects of grocery e-commerce. Questions start to come up, such as: Who is going to fulfill a customer’s order? The distribution center or a nearby store? Or, how do we account for online or mobile sales into demand forecasts?”
Bringing all channels together to create a unified customer experience is one challenge food and beverage companies face—but so, too, is balancing demand forecasting and replenishment to minimize waste, since grocery stores in 2018 accounted for 10 percent of total U.S. food waste.
“The food and beverage business is perhaps the most challenging to balance supply with demand due to the perishable nature of food products,” said Soni. “Most grocery retailers find themselves constantly in a reactive mode, which presents challenges in costs and waste. Namely, grocery stores can’t sell items past their expiration date, so any excess product becomes considerable waste. On the other hand, under-project demand, and you have unhappy customers and lost sales. It is already challenging enough trying to forecast demand at the store level—e-commerce only brings a whole new dimension to the equation.”