With all the volatility that still lingers in the modern supply chain, the need for high-quality data analysis, solid procurement planning, good profit margins, and streamlined scheduling systems all remain crucial for shipping and transportation providers. The right procurement plan will speed inventory access and allow for improved visibility into the supply chain network as a whole. Supply chain executives and managers need to understand the challenges of end-to-end visibility in grocery supply chains and other food and beverage services.
Why Poor Visibility in Grocery Procurement Plans Lead to Big Issues
When visibility remains absent from procurement, the essential buyers and merchandisers can struggle to match capacity with shipper companies. For grocers, this procurement plan often calls on records and trends to make predictions about capacity and inventory orders for the future. As a result, orders are placed ahead of predicted surges to have enough inventory to cover future demands. However, the biggest issue comes when there is a lack of visibility once the order is placed. For example, retailers often do not know until an order arrives if they receive 100%, 70%, or 50% of their anticipated order. This lack of insight and communication can lead to significant inefficiencies within the foodservice supply chain.
- More delays and bottlenecks due to scheduling interruptions and issues.
- Greater chance of being low on capacity or short inventory when needed.
- More challenging time with volume and production rates during peak seasons.
- Excessive idle time and dead haul miles due to poor route scheduling and setup.
- Wasted miles and fuel, and resources which add to overhead costs and expenses.
- Higher rate of rejected freight delivery due to damaged or spoiled food products.
- Lost profits and weak investment return along the entire supply chain.
- Slower response to disruptions and issues at any point during shipping.
- Decreased customer satisfaction and a greater chance of network stagnation.
More Visibility in Procurement Keeps Costs Low and Improves Efficiency
At the heart of any successful procurement plan is the need for effectiveness, adaptability, and scalability. Often, grocery supply chains fall victim to their inability to take advantage of innovative technology and collaborative planning opportunities. As a result, many grocers and foodservice providers still struggle with procurement efficiency and cost management. According to StoreBrands, shipping and logistics can be among the most costly and time-consuming aspects of supply chain management within the industry. At the heart of the issue is that within the foodservice industry, where most products shipped have a short shelf life, faster and more reliable delivery cycles are not just expected. They are now demanding these services. This constant movement of orders and shipments can cause problems without proper tracking, monitoring, and procurement planning.
Added Benefits of Visibility in Procurement Plan Implementation
By building an adaptable and scalable procurement plan, visibility throughout the supply chain can quickly become a driving force for growth and continued success. Along with the increased visibility, implementation of a solid procurement process can bring many other great benefits such as:
- Ability to route replenishment orders based on inventory availability and purchasing trends at the time.
- Increased inventory monitoring in the network, especially with direct-to-consumer shipments and orders.
- Reduced confusion over expected delivery time and clearer communications about any issues or delays.
- Renewed focus on customer-centric services and features helps ensure continued growth and expansion.
- Ability to avoid stock-outs and order returns due to inadequate inventory supply or poor capacity management.
- Sharing of data to forecast demand and expectations through seasonal highs and lows and changing markets.
- Lower transportation costs with a better view of the entire network to track and manage by exception.
Enhance Your Visibility Throughout Your Procurement Plan With the Right Collaborative Logistics Platform
The proper procurement and organizational solutions will allow grocers to achieve better results with improved logistical planning, more streamlined communications, and enhanced risk management. As consumer needs continue to shift and market trends keep coming and going, the need for visibility within supply chains will only grow in complexity. The key is determining the right approach and implementing the best procurement and management plan. Connect with Turvo to learn more today and enable supply chain growth.