Effective inventory management in food service sector - · PDF fileEffective inventory...
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Effective inventory management in food service sector
Mushtaque Ahmed
Chief Operating Officer
JJ Food Service Limited
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An independent food wholesaler and distributor for the catering industry with a national
coverage in the UK for 25 years. JJ Food Service
has driven its growth with innovation, flexibility and willingness to adapt.
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Quick Service Restaurants Coffee Houses Burger Bars Chicken Restaurants Kebab Restaurants Fish & Chips Pizza Restaurants Cafes Retailing News Agents Supermarkets Education Nurseries Primary & Secondary Schools College and Universities
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Doncaster
Manchester
Aston Enfield
Basingstoke Sidcup
Bristol
Leeds
Year 2013
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2007 2008 2009 2010 2011 2012 2013
Turnover, £ Millions
Turnover, £ Millions
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Available to promise
“We promise to our customers in real time if we can ship a product to the required address on the date needed”
We make this promise based on many factors, a key factor being the knowledge of our suppliers lead times and delivery schedule
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Available to promise
One purchase order error
One e-mail forgotten
One missed call
One late delivery
Thousands of unhappy customers
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Not so long ago...
• Inadequate forecasting capability of host ERP
• Hundreds of excel sheets
• No central repository for suppliers’ delivery rules
• Manual PO optimisation
• Special customers’ requirements (i.e. Public sector)
• No promotions or seasonality management tools
• No control over sales Vs waste for fresh produce
• Poor visibility of slow moving items
• Extremely long training period for new buyers
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Not so long ago...
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Why change – our shopping list
Increase automation • Free up valuable
resources • Keep all the
delivery parameters in the system
• Manage suppliers’ complex delivery rules
Better forecasting & replenishment • Intelligent
forecasting for seasonal items
• Keep track of various promotions and forecast accordingly
• Reduce wastage/ shortage of short shelf life products
Manage special situations • Holiday
management • Menu cycle
management in the education sector
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The RELEX approach
Phase 2: Real-life piloting
Phase 3: Production
roll-out
Proceeding to continuous utilisation
Phase 1: RELEX X-Ray,
process analysis
Specification of “as is” and “to
be” -states
Securing functionality
and benefits in real life
April: Data analysis
May: Implementation kick-off
July: Start of pilot
September: Go-live
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Today…
Increase automation • Free up valuable
resources • Keep all the delivery
parameters in the system
• Manage suppliers’ complex delivery rules
• Inventory parameters are automatically optimised and adjusted according to targets
• Orders are automatically filled to meet the restrictions – full pallets, lorries, etc.
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Efficient review of orders
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Today…
Better forecasting & replenishment • Intelligent
forecasting for seasonal items
• Keep track of various promotions and forecast accordingly
• Reduce wastage/ shortage of short shelf life products
• Seasonal patterns are automatically tracked from sales history
• Promotions are forecasted automatically based on previous promotions
• Fresh items are managed carefully taking into account shelf lives and category characteristics
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Automatic campaign forecasting
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Managing fresh items
• Replenishment for fresh items takes into account product shelf lives and product group characteristics
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Today…
Manage special situations • Holiday
management • Menu cycle
management in the education sector
• Bank holidays are automatically taken care of in forecasting and ordering
• Menu cycle information and estimated quantities are entered into the system and replenishment orders then calculated automatically
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School menu items
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Key technical advantages
• Extremely powerful database engine
• Software as a service
• Simple data interchange mechanism between host ERP/WMS and RELEX systems
• Web-based interface
• User specific data access
• Extremely short learning curve
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Achievements so far..
Increase in availability for fresh items, without any inventory increase
reduction in order processing time
reduction in overall inventory range for non-performing items
average increase in availability in slow moving items range
reduction in on hand inventory level
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Future plans
• Taking the next step: Not only optimising replenishment according to given rules, but assessing the rules and changing them together with suppliers
• Towards real-time: Updating data within the day, not only overnight, and running several replenishment runs during the day
• RELEX on mobile devices
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www.jjfoodservice.com