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Products with a short shelf life thrive on Agile Supply Chains.
Running a supply chain of perishables or products with a short shelf life is quite challenging. If the supplies are more than the demand, products expire on the shelves and are returned by the stores. On the other hand, if the supplies are lower, we end up with stockouts on shelves.
How do we balance supplies with demand in such a context?
The key lies in improving agility of the supply chain. Frequency of supplies is an important lever, which can minimise both stockouts as well as returns. It is quite common for manufacturers to go for daily replenishment of items like milk and breads. In some high throughput stores, it could even be multiple times in a day.
The other lever is in deciphering the evolving demand pattern and using it for replenishment. This is done by deploying Demand Sensing with a fast feedback loop.
We have seen stockouts as well as returns drop by as much as 50-75% by deploying the twin fast of Demand Sensing and Frequent Replenishment.