High-Velocity Supply Chains for Perishables: A Fresher Proposition - Cognizant
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• Cognizant 20-20 Insights
High-Velocity Supply Chains for
Perishables: A Fresher Proposition
To accelerate in-store delivery and ensure the freshest goods
for consumers, today’s retailers must redesign their value chains,
and create new ecosystems informed by sophisticated logistics and
superior inventory management.
Executive Summary
The perishables sector of the retail industry is Freshness is clearly on the agenda of leading
a case of extremes: above-index gross margins retailers; for example, in 2013, Wal-Mart initiated
and waste; large variations in volume-to-sales a program to ensure the freshness and quality
ratios (depending on seasonal and climatic of its fruits and vegetables, backed by a 100%
3
patterns) and a showcase for brand equity and money-back guarantee.
risk. In Australia, the grocery and fresh produce
1
retail industry registered a total turnover of Yet providing the freshest products to customers
$131 billion in 2009, with forecasted revenue remains a challenge for retailers, since doing so is
of $194 billion by 2020 (compound growth of not tied to a single business function; merchan-
3.7% p.a.). Approximately 40% of that revenue dising, store operations and the supply chain all
is derived from perishables – presenting an play a collaborative role in managing and main-
opportunity for retailers to achieve material, taining freshness and reducing shrinkage in the
commercial and financial gains. perishables cycle. While different approaches can
help retailers achieve this goal, developing a high-
At the same time, today’s consumers are better velocity supply chain is one of the most straight-
informed, and swayed by marketing campaigns forward strategies for ensuring freshness and
that focus on their health and well-being, realizing top- and bottom-line improvements.
and their desire for fresher, more nutritious
options. A recent report in The Wall Street This white paper provides insights on the
2
Journal highlights the changing preferences strategies, tools and technologies required to
of American consumers, who now favor fresh- frame and create a high-velocity, highly efficient
from-the-source products over pre-prepared perishables supply chain.
frozen meals. (Sales of the latter fell by 3% – to
$8.92 billion in the period between 2009 and
2013, according to Euromonitor International).
cognizant 20-20 insights | august 2015The Need for a High-Velocity retailers at different touch points in the supply
Supply Chain chain. And a longer supply chain translates into
more touch points. Each compromises product
According to Harvard Medical School’s Center for
freshness and quality due to factors related
Health and the Global Environment, in the U.S.,
to loading/unloading, wait and execution time
produce purchased at the grocery store normally
4 on the dock, malfunctioning cooling systems,
travels more than 1,500 miles from farm to
or incorrect configurations that can result in
table. A typical Australian food basket travels an
shrinkage or waste.
estimated 70,000km – equivalent to travelling
around the circumference of the earth twice or A high-velocity supply chain can reduce waste
5
around Australia’s coastline three times. (shrink) across the chain by delivering product
to store with an extended shelf life (i.e., by
While these are impressive logistics, a road
consuming less of the finite shelf life between
literally less travelled could lead to fresher goods
manufacture or harvest and sale).
and better nutrition for the customer.
Extending shelf life provides more opportunities
In-store product freshness positively influences
for a product to be picked from the shelf, and
customer demand. As stated in a report by
reduces the likelihood of it being thrown away
consulting firm Oliver Wyman, “Customers who
due to expiration. A 2010 study by the Asian Food
are satisfied with freshness will spend over a third
Information Centre (AFIC) reveals that 67% of
more in the produce department of their primary
consumers in India actively consider expiration
store compared to those who are not satisfied. At 7
dates before buying perishable goods.
Increasing the velocity of a retail
While perishables make up about 38% of total
supply chain increases revenue and store sales, they contribute up to 65% of total
gross profit proportionately. 8
store shrink. Increasing the velocity of a retail
supply chain increases revenue and gross profit
the same time, they will spend 8% more of their proportionately (see Figure 1). The speed of the
total grocery spend with retailers whose produce supply chain can be directly linked to the days it
they are pleased with than the shoppers who are takes to deliver a product ready for sale in store.
not happy with that store’s produce.” The report The faster this is executed, the wider the window
also stated that “freshness and shrink, managed of opportunity to sell, and the less chance of
together, can add as much as $60M a year to a shrinkage/waste.
$10BN chain’s earnings while growing sales and
6 Days to Deliver ∝ 1
improving its market positioning.
(Opportunity to Sell)
Nonetheless, estimates tell us that produce
Opportunity to Sell ∝ Sales
spends up to 50% of its life between suppliers and
Waste/Shrinkage
Profit Potential from Increasing Supply Chain Velocity
Procurement, Warehouse & Transportation Procurement, Warehouse & Transportation
$ Value $ Value
(Sales (Sales VALUE
and G.P.) and G.P.)
Waste Waste
10 days Time 5 days Time
Supply Chain-1 Supply Chain-2
The transition from Supply Chain 1 to Supply Chain 2 shows how a high-velocity supply chain can improve gross profit.
Figure 1
cognizant 20-20 insights 2The Perishables Supply Chain: Value vs. Time
Pick at Vendor
$ value of
Perishable Product Loss
$ Value of Risk/Waste
Product
Sale
Time
In the critical time period between picking at the source, to sale at the retail site, a perishable product loses value
rapidly through product degradation. The supply chain must be responsive in the initial stage and cost-effective in
the latter stage.
Figure 2
The industry average for retail shrinkage in the product lines, based on lead-time analysis.
U.S. is around 2.7% of retail sales, with 65% Improving velocity through the supply chain for
9
of that attributed to perishables. Clearly, an these items will have an incremental impact on
opportunity exists to reduce shrinkage, increase profitability and decrease waste.
overall revenue and provide a fresher proposi-
tion to the customer by accelerating supply chain At-risk items are identified based on their ESL
velocity. The question is how? In the following (effective shelf life, i.e., the remaining life of an
pages, we will answer that question, and detail
measures that can be taken to create a high- Freshness and shrink, managed
velocity supply chain. together, can add as much as $60M
Crafting a High-Velocity Supply Chain a year to a $10BN chain’s earnings
for Perishables while growing sales and improving
Bringing efficiency to the perishables supply chain its market positioning.
is not just about the transportation lead time for
logistics. That responsibility lies with all functions
item) after removing lead-time components and
within the organisation that are engaged in the
minimum freshness days* from the total shelf life.
end-to-end supply chain. Any sustainable velocity
ESL represents the window of opportunity to sell
strategy will require all processes involved in
a perishable item at maximum margin.
product flow and management to work together
seamlessly. Effective Shelf Life (ESL)
=T otal Shelf Life – Supplier to Customer Lead
Before investigating or executing an optimal
Time – Minimum Freshness Days
organisational structure, it is important to start
with a process analysis to diagnose the root * Minimum freshness days is the number of days a
cause of impediments to supply-chain velocity. product must maintain freshness in order for a cus-
This exercise, which includes the steps above, tomer to accept it, e.g., a customer will buy milk if it
has a minimum of two days of freshness remaining or
will quickly reveal areas for improvement, and is set to expire after two days.
help define future initiatives and subsequent
implementation plans. 2. Perform a High-Level Supply Chain
Analysis
1. Identify Priority Action Items
Following item prioritisation, the next step is to
Optimising every stock keeping unit (SKU) in a review the end-to-end supply chain and isolate
supply chain is unfeasible. A more pragmatic the time spent at each node, or transportation
approach is a Pareto-style analysis to define leg, in the chain. This reveals the value chain’s
the top 20% “highest value” and “most at risk” role within each site, the high-level integration
cognizant 20-20 insights 3The Pressure to Maximize Margins
Vendor Distribution Centers Store Customer
TOTAL SHELF LIFE = 20 days
Freshness Risk Matrix
REMAINING SHELF LIFE = 12 days
REMAINING SHELF LIFE = 10 days
Transport/Handling Transport/Handling
= 8 days = 2 days
Min. Fresh
6 4
Effective Shelf
Days Required
Life = 6 Days
= 4 Days
Time
Out of the 20 days of total shelf time, only six are available to sell the product at full margin in-store.
Figure 3
touch points, and the lead time at each stage of curement, etc. The intent is to build a quantitative
the supply chain (see Figure 4). supply chain matrix that will help identify non-
value-adding processes in the supply network.
3. Perform a Detailed Process Analysis
Following the high-level supply chain analysis, the Capturing and obtaining access to the right infor-
next step is to deep-dive into lower-level processes mation is an important investment for retailers,
and activities, then categorize each process and key to realizing the maximum benefits from
stage as either a value-adding or non-value-add- this analysis. Most retailers retain generic infor-
ing activity. The detailed analysis on the list of mation about transport lead time, wait time, etc.,
process steps will identify (for removal) the latter, or store it in various systems.
and reveal opportunities to reduce the lead-time
4. Identify Future Initiatives and Actions
of value-adding tasks. Figure 5 on the following
page is an example of a detailed process analysis Restructuring the supply chain by eliminating
worksheet. non-value-adding process steps (as identified in
Step 3) and selectively implementing industry
At this stage, data must be captured from various best practices can lead to a highly efficient, high-
areas and systems at each point related to velocity supply chain. At the same time, every
freshness and waste. This includes systems for retailer has different challenges, and must work
warehouse, transportation, point-of-sale, pro- innovatively to achieve their objectives. Based
Stepping Through the Supply Chain
Transport
Producers/Farms Packers Processor Warehouse Store
Figure 4
cognizant 20-20 insights 4Detailed Process Analysis
Process Steps - Warehouse Receiving & Putaway
Putaway Hour Clock (00:00 to 24:00) 2014
Activities 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 Total Days
Step-1 NVA NVA NVA NVA M M M NVA M M M 11
Step-2 M M M M M M M M M NVA 10
Step-3 NVA NVA NVA M M M 6
Step-4 M M M NVA NVA NVA M M M M M M 12
Step-5 M M M NVA NVA M M M M M M NVA 12
Putaway Total 1 2 2 2 2 2 3 4 2 2 1 2 2 3 3 1 1 1 2 1 1 1 2 2 2 1 1 1 1 51
Color Key NVA Non Value Adding M Value Adding
Figure 5
on the outcomes of the detailed process analysis, • Key Performance Indicators (KPIs): Each
these companies can identify areas for improve- entity in a perishables supply chain must have
ment and formulate key future initiatives. its KPIs engineered to assure freshness and ef-
ficiency. For example, a procurement manager
Examples of initiatives undertaken by retailers should define targets to reduce overall lead-
include: time and shrink/wastage in the supply chain.
Fostering the achievement of these targets will
• Collaboration with supply partners for speed
help align people and processes with the com-
and freshness.
mon goals of delivering freshness and maxi-
• Automation to reduce warehouse processing mising perishable supply velocity.
time.
• Centralized functions: Organisations are
• Implementation of sophisticated replenish- working to centralize functions across the
ment technology with special considerations supply chain in order to maximize efficien-
for freshness. cies and tighten delivery times. Centralization
As with any investment decision, prioritising helps to more effectively manage regulatory
future initiatives based on their potential impact obligations, assure compliance (in this case,
and benefits is highly recommended. for perishables), and standardize processes
and practices.
Implementation Considerations and Transitioning from scattered procurement
Industry Best Practices processes with different objectives to central-
Moving to a high-velocity supply chain requires ized procurement can help accelerate product
organisational alignment and commitment, the flow and reduce waste. However, completely
adoption of industry best practices, and seamless centralizing operations may not be possible or
implementation of leading technologies (see applicable in all situations; many progressive
Figure 6, next page). organisations have adopted a hybrid approach
that combines a centralized strategy to gain
Nonetheless, with 65% of all stores’ shrink consensus with decentralized execution to
occurring in perishables departments, we see improve service.
11
only best-in-class (top 25%) companies placing
more emphasis on implementing industry-proven • Centralized supply chain leadership: An
emerging global trend is to unify procure-
best practices. These organisations are demon-
ment, logistics, contract management, fore-
strating an average of 22% less shrink in perish-
casting/demand planning and similar man-
ables departments than the remaining 75%.10
agement functions under a single supply
Organisational Design chain leader. This helps facilitate effective
decision making with a view spanning the en-
An effective organisational design must be guided
tire supply chain.
by a formal process for integrating people, infor-
mation and technologies across the enterprise – • Supply chain council for food chain: The
all focused on meeting key business objectives. purpose of a governing council is to provide
Thus, a design that supports a high-velocity direction and help align the supply chain
12
supply chain must take into account the following: strategy with all other functions and depart-
ments in the organisation. The council can
cognizant 20-20 insights 5Enabling a High-Velocity Supply Chain
High-Velocity
Supply Chain
Organisational Design Business Process Technology
(Industry Best Practices) Enablers
(Best of Breed)
Figure 6
help measure and monitor the impact of new to the big markets to ensure that perishable
initiatives for perishables. Its membership items get to customers within 48 hours of
13
should include the leader of the supply chain being harvested.
organisation, as well as corporate executives, Vertical integration may not be the best
business unit managers and other influential solution for all supply chains; however, grocery
stakeholders within the company. Its exis- retailers must re-evaluate their supply network
tence will indicate that supply chain manage- and examine the benefits of vertical integra-
ment has the endorsement and commitment tion while analysing the market competition
of senior leadership. and the dominance of buyers and sellers.
Business Process Changes Over the 2011/12 financial year, affirming
To meet customers’ needs for freshness, the vertical integration model, Morrison’s
retailers must revisit their ability to plan and opened 37 new stores, acquired two manu-
execute process and supply chain strategies. facturing sites, and established a major new
As illustrated in Figure 7 (see next page), the distribution centre. Efficient processes, a
following represent industry best practices for vertically integrated business model and a
maximising velocity and responsiveness across cost-conscious culture enabled Morrison’s to
the perishables supply chain. drive out unnecessary waste and allowed the
company to offer its customers great food at
• Process collaboration: Leading perishables “affordable” prices.
14
retailers already enjoy a high level of collabo-
ration with their supply chain partners. They >>Network collaboration: Perishables retail-
ers need to look at increasing collaboration
not only collaborate on data, but also on pro-
in extended supply chain networks to help
cesses and business objectives. Since a per-
bridge the gap between vendors and custom-
ishables supply chain depends on speed, the
ers. An emerging trend is for supply chain
crucial collaboraton focal points are vertical
partners to share distribution networks and
integration, innovations in network sharing,
infrastructure. Although not popular for dis-
and sharing demand forecasts.
tributing highly perishable items, this model
>> Vertical integration – “paddock to plate” is being used by Kraft, Nestle, Heinz, Unile-
value chain: The emerging trend in per- ver and several other retailers in Europe to
ishables is to maintain effective control transport shelf-stable foods.
15
of supply, quality and speed. Many retail-
The ECR Sustainable Distribution Group
ers are investing in fruit, vegetable and
initiative (UK) aims to decrease the food
livestock farming, either through collabo-
and grocery industry’s transport miles
ration or ownership, to secure supply and
by sharing vehicles and improving the
ensure freshness. The goal is to exert more
efficiency of warehousing networks. To date,
control over the end-to-end supply chain
this initiative is said to have saved 24 million
through vertical integration, and minimize
road miles on UK roads and 60 million liters
the total supply lead time from farms to 16
of diesel fuel per year.
customers.
For example, Aussie Farmers Direct has >>Single view of forecast: Sharing the de-
mand forecast and POS data with suppliers
designed its supply chain as close as possible
cognizant 20-20 insights 6Process Changes – Key Drivers
Supply
Vendor Contracts
Chain
Visibility
High Velocity
Supply Chain
Key Drivers
Collaboration Dynamic Allocation
Demand
Forecasting
Lean Logistics
Figure 7
(within organisational norms) diminishes the 24% of unit sales and 52% of total profit
17
bullwhip effect across the supply chain by in the grocery channel. Further, the report
reducing inventory costs at supplier hubs noted that of the top-ten food categories by
and helping to control production costs. dollar volume, seven were fulfilled through
19
As a result, the retailer receives fresher DSD processes.
product on time, and with a lower probability The DSD model launched by Nestlé in 2009
of stock-out. ensured the availability of Nestlé products
For Smithfield Foods Inc., a pork processor wherever and whenever consumers wanted
and hog producer, the biggest challenge is them, thereby allowing the company to
18
to determine how many hogs to produce. continue broadening its distribution base
If the company can forecast customer into non-traditional alternative locations.
demand (i.e., how many leg hams are In 2012, following the model’s success,
required, say in December), it can determine Nestlé also invested in modern DSD/route
20
when and how many hogs to have ready — accounting solutions.
allowing time for the sow to be bred and give A centralized distribution network is another
birth, and for the pigs to grow. way to tread the line between optimising truck
• Lean logistics with innovative distribution loads and meeting the need to ship quickly
strategy: Perishable products require unique and directly. In this model, small branch
distribution strategies. The journey to a lean warehouses are positioned close to the point
supply chain begins with innovative distribu- of consumption; stores do not rely on tradi-
tion channels and progresses through contin- tional warehouses to receive products that
uous process improvements, automation, and take longer to process and ship.
the adoption of best-in-class technologies. Warehouse processes, if not optimised
Sourcing a product is only half the job; the separately for perishables, may slow time to
item must also be available at the store, store. Through agreements with suppliers,
and time to store is directly tied to network retailers can leverage advance shipping notes
complexity. There is a growing need to strate- (ASNs), enabling warehouses to pre-allocate
gically leverage the DSD (direct store delivery) the shipment to be received for cross-docking,
channel directly from farms/production to or make necessary arrangements for flow-
store/customer to distribute more product. through/pick-to-zero.
In 2008, the Grocery Manufacturers Asso- Aligning replenishment frequency with the
ciation (GMA) reported that DSD represents
cognizant 20-20 insights 7vendor ordering calendar and receipt times at mated replenishment and inventory planning
stores/warehouses is essential to achieving are standard practices among leading retail-
a smooth product flow throughout the ers, measures for gauging the freshness of
supply chain. perishable goods (e.g., shelf life, wastage pa-
rameters) in planning systems are rare. Lead-
• Dynamic allocation: The freshness of products
ing software providers are enhancing their
at a warehouse is a primary success criteria for
fulfilling a stock-allocation strategy. The key
is to have clear visibility of the expiry date or The journey to a lean supply chain begins
“best before” date of the available and in-transit with innovative distribution channels
stock. The warehouse should also be able to per-
form dynamic allocation to avoid waste.
and progresses through continuous
process improvements, automation, and
The rapid growth of multi-option retail
has made order fulfilment more complex. best-in-class technologies.
Therefore, the supply chain must be able to
prioritize and optimize the management of solutions by incorporating perishables re-
e-commerce and retail store orders. plenishment modules in their offerings. Inven-
• Supply chain visibility: An estimated 30 per- tory planning and replenishment information
cent of all global perishables shipments never from automated planning systems can reduce
reach consumers because of a variety of supply shrinkage to a great extent and help pick up
21
chain issues. Monitoring stock levels over the speed in the supply chain.
course of the day through the supply network, JDA offers “Date Sensitive Inventory” (DSI), a
ideally in real time, can further improve invento- module within the JDA Fulfillment application
ry management. Traceability is an important as- that can accelerate delivery to customers. DSI
pect in identifying areas for improvement. It can enables a time-phased replenishment plan for
help determine the actual lead time, processing store and warehouse deliveries by optimising
time and wait time at each step in the supply order size and order frequency based on
chain before the product reaches the customer. freshness criteria and wastage constraints.
Papa John’s implemented Manhattan Associates’ The JDA perishables system helped Butterball
fleet software system and a visibility package, manage perishables-related issues, reduce
UK-based Isotrak, to boost its freight-tracking risk and improve customer satisfaction. With
capabilities. A 2013 case study by Manhattan the implementation of JDA’s date-sensitive
Associates highlights that the implementa- inventory management module, planners could
tion of new technology provided unprecedent- modify Butterball’s plans to minimize any excess
ed visibility, reduced expenses and improved inventory and ensure customer satisfaction.
23
efficiency and productivity at every point in the
22 The key advantages of the JDA perishables
supply chain.
system (i.e., date sensitive inventory) include:
• Procurement considerations: The effective
shelf life of a product should be a key con- >> Implementation speed and scalability (ease
of configuration and deployment).
sideration during contract formulation and
sign-off. A retailer must define a realistic lead >> Enhanced visibility into the replenishment
time that meets freshness criteria and ensures plan (advance planning/speed).
compliance. Penalties and rewards are agreed
upon during negotiations and when defining
>> More visibility into inventory at the distribu-
tion center and in the store with the expira-
terms of purchase with suppliers. tion date (less shrink).
Technology Enablers >> Optimised orders (quantity/frequency) with
Implementing industry best practices, organ- perishables consideration (less shrink).
isational design and appropriate technologies
are critical to achieving a high-velocity supply
>> Perishables-specific
exception for taking
proactive actions (management by excep-
chain. Some of the key technologies and consid-
tion).
erations are:
>> Future visibility of quantity being expired
• Automated replenishment and inventory (visibility to trigger proactive actions for
planning to optimise freshness: While auto- markdown or promotion).
cognizant 20-20 insights 8SAP (via the SAP for Retail suite) offers pro- why consumers decide to buy or not to buy
curement capabilities for managing perish- a product or service. The Planalytics solution
ables. Buyers can create scenarios for a push/ gathers weather-driven demand signals and
pull strategy, distribution to stores and vendor assists in sales-history cleansing to formulate
27
evaluation. The critical needs of buyers are baseline forecasts.
addressed through SAP’s Perishables Pro- “Our weather-driven demand number is tied
curement Work Centre. This module provides directly to what percentage of our sales were
buyers with the tools and consolidated infor- up or down. You would be amazed at the cor-
mation they need to manage purchasing\ relation between how our volume performs
distribution decisions for perishables across
24 and how the weather performs.” (Testimonial
business divisions. 28
by Subway at Planalytics.)
The starter pack service for grocery retailing
and meat processing includes unique solutions
• Management by exception: A supply chain
team should be alerted by system-generat-
from SAP for Retail and SAP Enterprise ed exceptions that allow the team to focus
Solution Services. It offers a complete on priority issues. The intent is to avoid any
solution based on SAP best practices for retail delay in taking action.
packages, supports pre-configured, industry-
specific business processes, and offers a • Efficiency through innovative solutions:
number of enhancements.
25 Quickly delivering a product to the customer
is a key success factor in the perishables
The Oracle Retail Advanced Inventory supply chain; however, this capability often
Planning system calculates the product/store comes with a high cost. Consequently, there
level inventory need for perishable products is a pressing need to generate innovative
– balancing waste and availability based on solutions that alternately add value and/or
an item’s shelf life and acceptable loss due to
26 remove non-value-adding activities.
waste.
• Traceability and tracking technologies:
• Forecasting tools with perishables char- Retailers are continuously evolving and
acteristics: Retailers must use best-in-class embracing more sophisticated technolo-
technologies to generate accurate forecasts, gies to track stock through the supply chain
which in turn drive a more efficient and network. Adopting leading-edge technolo-
effective supply chain. gies such as RFID or real-time visibility tools
Forecasting tools for perishables must offer is required to minimize product shrinkage in
random weight consideration; incorporate perishables. Using global standards such as
robust algorithms to account for seasonal- GS1 DataBar across the supply chain will help
ity; distinguish demand anomalies due to track information such as lot number, serial
marketing/promotions, and employ lost sales number and expiry dates. Standardization
calculation logic along with basic functions. through the global trade item number (GTIN)
Multiple software companies provide demand- provides accurate traceability of products in
forecasting tools; all should be evaluated and end-to-end supply networks.
Looking Forward
An estimated 30 percent of all The perishables supply chain is unique in
global perishables shipments never terms of operations and product character-
istics. Retailers looking to develop a world-
reach consumers because of a variety
class perishables supply network must first
of supply chain issues. understand the concept of an effective shelf
life (the available days that a product can be
selected based on the specific needs of the sold without becoming unfit for consumption)
organisation. in order to identify the top 20% of items that
contribute to 80% of waste.
• Technology to integrate weather impacts:
Exceptional weather events can have a It is important to adopt a structured approach
major business impact; however, daily for analyzing and uncovering the root cause
weather may have an even greater effect. of waste and identifying future initiatives.
Weather conditions are a primary reason Vertical integration, network collaboration
cognizant 20-20 insights 9and collaborative planning create a foundation Adopting perishables-specific technologies can
for an efficient and sustainable supply chain. help lead the way to a high-velocity supply chain
Enforcing perishables KPIs within the organisa- that accelerates and coordinates information, aligns
tion and compelling all stakeholders to ensure business processes, reduces waste and assures the
the delivery of fresh products will serve as a delivery and availability of fresh products. In this
catalyst for achieving the objective of a fresh way, retailers can boost sales, reduce shrinkage and
supply chain. establish a “fresh” connect with consumers.
Footnotes
1 2020: Industry at a Crossroads, Australian Food and Grocery Council. https://www.atkearney.com/
documents/10192/178350/2020_industry_at_a_crossroads_final.pdf/702b00d1-cdca-4e8f-85d8-
7f55dbc26952.
2 The Wall Street Journal, “Frozen Foods Grow Cold as Tastes Shift to Fresher Fare,” June 26, 2014. http://
online.wsj.com/articles/frozen-foods-grow-cold-as-tastes-shift-to-fresher-fare-1403826097.
3 “Walmart Launches Fresh Produce Guarantee in U.S. Stores.” http://news.walmart.com/news-
archive/2013/06/03/walmart-launches-fresh-produce-guarantee-in-us-stores.
4 Sophie Glabella and Asha Bee Abraham, Food Miles in Australia: A Preliminary Study of Melbourne, Victoria
[Internet], 2008 [cited June 20, 2008]. http://www.ceres.org.au/sites/default/files/CERES_Report_%20
Food_Miles_in_Australia_March08.pdf http://www.ecofriendlyfood.org.au/buy_locally.
5 “Fresh Infatuation,” CNBC.com, 08-Oct-12. http://m.cnbc.com/special_reports/5/content/49101716/1.
6 Oliver Wyman, “A Retailer’s Recipe.” http://www.oliverwyman.com/content/dam/oliver-wyman/global/
en/2014/jul/2014_OW_aRetailersRecipe_4.pdf.
7 Arvind Singh Rana, “Old is no Longer Gold - Applying theory of constraints to improve freshness of
products.” http://www.vectorconsulting.in/insights/consumer-goods/old_is_gold_no_more.html.
8 “Sales And Shrink By Department, Where’s my Shrink?” http://wheresmyshrink.com/shrinkbydepartment.
html.
9 National Retail Research Group Facts. http://www.retailcontrol.com/articles/7-facts-about-retail-shrink-
that-will-blow-you-away%E2%80%A6/ | http://wheresmyshrink.com/executivesummary.html.
10 “Trends in Loss Prevention and Store Operations Control for 2012.” http://www.retailcontrol.com/articles/6-
trends-in-loss-prevention-and-store-operations-control-for-2012/.
11 Bob Engel, “10 Best Practices You Should be Doing Now,” Quarter 1, 2011 issue. http://www.supplychain-
quarterly.com/print/scq201101bestpractices/.
12 Ibid.
13 “Taking advantage of the Organic Supply Chain,” Australian Organic Spring 2013 | Issue No.1.
14 Corporate Responsibility Review 2011/12 - Food with thought, Wm Morrison Supermarkets PLC http://your.
morrisons.com/Documents/Morrisons_CR_Review_5MB.pdf.
15 Emerging Trends in US Logistics Part II: Food Safety Trends—Food chain Intelligence. http://www.food-chain.
com.au/Dispatch3.pdf.
16 “An Emerging Coffee Trend - Food Chain Intelligence.” www.food-chain.com.au/ABF.pdf.
17 Reducing the Bullwhip Effect via Market Research-Gleaned Insights, Cognizant. http://www.cognizant.com/
InsightsWhitepapers/Reducing-the-Bullwhip-Effect-via-Market-Research-Gleaned-Insights.pdf.
18 “Temperature-Controlled Logistics: Provide or Perish.” http://www.inboundlogistics.com/cms/article/tem-
perature-controlled-logistics-provide-or-perish/.
19 Powering Growth Through Direct Store Delivery, Sept., 2008. Grocery Manufacturers Association (GMA).
http://www.gmaonline.org/downloads/research-and-reports/DSD_Final_111108.pdf.
20 “Nestle’s DSD Model Opens New Retail Channels.” http://www.dairyfoods.com/articles/87925-nestles-dsd-
model-opens-new-retail-channels.
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papa-john-s-optimizes-inventory-visibility-and-transportation.
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24 SAP for Retail: Help. http://help.sap.com/saphelp_46c/helpdata/en/ae/59637806ba11d3ae06080009d22
32d/content.htm http://wiki.scn.sap.com/wiki/display/Retail/Perishables+Procurement.
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sap.com/bin/sapcom/en_us/downloadasset.2012-11-nov-30-08.plan-deploy-and-optimize-retail-software-
faster-and-easier-than-ever-pdf.html.
26 Oracle Retail Application Products Overview. http://www.oracle.com/us/products/applications/retail/
supply-chain-planning/advanced-inventory-planning/overview/index.html | http://www.oracle.com/us/
products/applications/047071.pdf.
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About the Authors
John Bacon is Director of Consulting with Cognizant Business Consulting, working with clients in the ANZ
region. He has over 20 years of experience in the retail sector in executive management across buying,
pricing, e-commerce, retail operations and information technology, and consulting roles across APAC in
supply chain strategy and transformation, retail analytics, e-commerce and digital functions. John holds a
bachelor’s degree in information technology from Queensland University of Technology (QUT). He earned
his certification in Training & Workplace Assessment from Box Hill Institute (BHI). He can be reached at
John.Bacon@cognizant.com.
Nitin Khanna is a Senior Consultant within Cognizant Business Consulting’s Retail Practice. He has
10 years-plus of experience across supply chain management and operations in retail, consumer goods,
process and manufacturing industries. He is a certified supply chain professional by APICS, and holds
an M.B.A. from NITIE, Mumbai, India and a bachelor’s degree in engineering from IIT Roorkee. He can be
reached at Nitin.Khanna@cognizant.com.
Vivek Naithani is a Manager in Cognizant’s Business Consulting practice, with over 10 years of experience
in the retail and supply chain space. Vivek’s current areas of interest include merchandising, integrated
planning, supply chain visibility and traceability, and supply chain compliance. He is a certified supply chain
professional by APICS, and holds an M.B.A from MDI, Gurgaon, and a bachelor’s degree in engineering from
PEC, Chandigarh. He can be reached at Vivek.Naithani@cognizant.com.
About Cognizant
Cognizant (NASDAQ: CTSH) is a leading provider of information technology, consulting, and business
process outsourcing services, dedicated to helping the world’s leading companies build stronger busi-
nesses. Headquartered in Teaneck, New Jersey (U.S.), Cognizant combines a passion for client satisfac-
tion, technology innovation, deep industry and business process expertise, and a global, collaborative
workforce that embodies the future of work. With over 100 development and delivery centers worldwide
and approximately 218,000 employees as of June 30, 2015, Cognizant is a member of the NASDAQ-100,
the S&P 500, the Forbes Global 2000, and the Fortune 500 and is ranked among the top performing and
fastest growing companies in the world. Visit us online at www.cognizant.com or follow us on Twitter: Cognizant.
World Headquarters European Headquarters India Operations Headquarters
500 Frank W. Burr Blvd. 1 Kingdom Street #5/535, Old Mahabalipuram Road
Teaneck, NJ 07666 USA Paddington Central Okkiyam Pettai, Thoraipakkam
Phone: +1 201 801 0233 London W2 6BD Chennai, 600 096 India
Fax: +1 201 801 0243 Phone: +44 (0) 20 7297 7600 Phone: +91 (0) 44 4209 6000
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© Copyright 2015, Cognizant. All rights reserved. No part of this document may be reproduced, stored in a retrieval system, transmitted in any form or by any
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