Archive for the Category Business

 
 

Fresh Retailer’s dilemma concludes…

Well, you can stop the bleeding only when you know where to apply band-aid. With first step taken by capturing data on where all the category is bleeding, balm can be applied to target areas to bring the shrink down.

In corporations quite often it is not possible to even start the healing process without getting a sign off from bottom to the top. Everyone has to know and acknowledge that they own part of the problem. When you start delving deeper, you will find that department lime Commercial and IT which apparently look remotely linked with Freshness issue, contributes a lot towards shrinkage. (Ask me – I’ll tell you how). Only this way it is possible to crack the issue. Next step would be to nominate someone who is now responsible for freshness or dump/shrink- end to end – period. It is also important that this freshness officer reports to the chief executive and is suitably empowered. It is pertinent to note here that this freshness executive is bound to ruffle many feathers. Organisations which thrive on polticking and back-biting shall ensure that this freshness officer is moved out of scene. So it is important to create safeguards in this regard. The scene now set for implementing and executing the crated agenda and thereafter measure and contol the losses. This approach shall sure work than bringing in cold chain and costly technologies. Good luck fresh produce retailers. You still have a long way to go….      

Fresh retailer’s dilemma continues….

At its core, fresh retailer’s dilemma (read freshness / wastage predicament) is an inventory management issue.

But is it only a supply chain problem? What about impact of merchandising – their planograms, displays, promos and Store operations? What about procurement department which has to lift committed quantities oblivious of front end needs? What about logistics which has to honor vehicle movement restrictions put by city administrators? What about loss prevention (ironically responsible for reducing shrink) who have to seal fresh breathing produce in sealed closed trucks?

To make a dent into what look like a simple inventory management issue, a fresh retailer has to take a multidisciplinary and multi departmental approach to manage complexities that may eventually leads to new business processes, perhaps a new business model or altered organizational structure.

Beginning of course has to made by capturing data to get insights into what causes freshness leading to lesser dumps and vice versa. Though not a resource hungry approach but it is easier said than done. Are metrics available on FRESHNESS? What about its alter ego, dump / shrink? Let’s start with measuring that without each element in the value chain accusing one another as a dump / shrink contributor. To be continued..

Fresh retailer’s dilemma

Some one has said….. ‘The concept ‘fresh’ is in the limelight. One often asks, for example, what is considered fresh and what not. ‘Fresh’ is a multi-faceted concept. To the retailer, fresh is a product segment, while it actually also connotes quality. In logistics, fresh has a uniform message: a fresh product is perishable. It is this that makes the work of a fresh products purchaser for a retailer so special. The purchaser has to buy products of the right quality which a) cater to market demands, and b) fit the timing necessary for distribution and marketing. Orders of fresh products for the shop floor have to be estimated correctly because empty shelves are a no-no, on the one hand, while product waste due to decay has to be minimized, on the other. Value decrease due to quality loss can result in price reductions, or even result in products being thrown away. If product waste in a retail outlet is too low, this could signify a risk of empty shelves and an inability to offer fresh products to the consumer (nil sales). This smaller assortment will lead to drop both in turnover and customer service. If product waste is too high, one could increase the returns of the fresh segment by counter measures’. But what are those counter measures? Some other time..

It is all about needs..

Why farmers’ grow fruit and vegetables? To satisfy a house wife’s need while earning money to satisfy theirs. A supermarket is a meeting point to link house wives and farmers to satisfy supermarket’s promoting company’s needs, which in turn has floated the retail chain to satisfy needs of its shareholders.

So a supermarket is the centre point to satisfy needs of farmers, housewives, shareholders and of course supermarket’s workers.

What a humble radish could achieve is simply mind boggling. 

Selling perishables for a living…..

Fresh produce sector in the India continues to grow. Like agriculture, markets for perishable products are increasingly complex. However, unlike many agricultural sectors, fresh produce markets often involve much higher risks, with the potential for corresponding higher rewards.

A market with low liquidity, high price volatility, little transparency and virtually no standardized products at wholesaling, ancient regulatory /legal environment, absence of cool chain, fragmented retailers and low decision involvement at retail end, creates unique challenges.

Recent innovations in distribution and technology, retailer and wholesaler consolidation, changing legal environment, international policies, food safety issues, and health concerns are creating new challenges and new opportunities in a sector where per acre cost of production is already very high and government safety nets do not exist.

This is my world…….I trade perishables for a living and enjoy every moment of it.