Suppliers to UK grocery retailers deserve to receive timely and accurate demand forecasts. However, when supply is fairly free and ready, many retailers struggle to achieve this accurately and consistently – an issue highlighted by the Groceries Code Adjudicator in its June ’18 Best Practice Statement.
A supplier needs to know what to produce, and plan all the associated knock-ons, such as labour, raw materials and transport. A collaborative retail-supplier relationship should be using all available data to ensure that the balance between 100% availability and 0% waste is as good as it can be.
Product, day and depot
If the aim of forecast sharing is to ensure suppliers meet order expectations, then they need to receive the forecast order volume by product, day and depot. Without this, any other ‘forecast’ is at best a guide to what might be required and when, but won’t help suppliers ensure the appropriate inventory is in the right location at the right time.
In times of scarcity or limited availability, forecasting becomes even more important. Variable, inconsistent or inaccurate forecasting exacerbates the problems in every supply chain and, ultimately, prevents the best use of produce, prevents the right products from being in the right store at the right time, and increases waste.
Yes, forecasting is difficult, particularly for perishable and short shelf-life items, but there is no reason why grocery retailers cannot provide good-quality data to help suppliers make more informed decisions.
Current thinking around the grocery retail supply chain needs to change. It is incumbent on retailers, suppliers and regulators alike to start working collaboratively, to define a set of standards around forecasting, and to establish clear lines of decision-making responsibility.
With increased scrutiny on food availability and wastage, time is – literally – of the essence.
Guy Cuthbert is chief executive and chief technology officer at Atheon Analytics.