CIOs Investigate How To Use IT To Improve Food-Supply Management

Grocery Store CIOs are using technology to manage the food-supply chain
Grocery Store CIOs are using technology to manage the food-supply chain
Image Credit: Nick Saltmarsh

I am willing to bet that when you go to the grocery store, the store is filled with food products. In fact, I’m also willing to bet that pretty much any day of the week or any time of the day that you go to the grocery store its filled head-to-toe with the food products that you want to buy. Most of us don’t spend a lot of time thinking about just exactly how all of this happens day in and day out. However, the CIOs at the grocery chains spend most of their day worrying about just exactly how each one of those food products will make it into the store and onto the shelves. The good news for them is that technology is starting to be created that will help them to do things like this even better.

The Challenge Of Keeping A Grocery Stocked

The way that CIOs keep their grocery stores stocked with food is by working with suppliers to make sure that they understand the importance of information technology and that the right products show up at the right times. This is a very difficult thing to do. That’s why a number of U.S. grocery store CIOs are now turning to artificial intelligence (AI) as a way to fundamentally overhaul how they go about ordering food from their suppliers. There are two goals to doing this. The first is to improve how the grocery stores can predict customer demand. The second is to try to get perishables and other products onto store shelves faster.

The advantage of turning the process of working with grocery store suppliers over to software is because they can do it better than humans can. One of the biggest advantages of using software is that the software can provide the CIOs with a single logical view of the grocery store’s inventory across all brands. This means that they won’t just see the number of hotdogs that they have from supplier A, but rather they’ll be able to how many hotdogs they have from suppliers A, B, and C. This view of their current supply can also be aggregated across all of the stores in the grocery chain in order to provide a complete view.

A change like this doesn’t happen overnight. Instead, the software has been trialed in two grocery store chains and over the next three years it will be rolled out over six additional chains. Currently the system is designed to help with the purchasing of perishable products since they are the most expensive and the most likely to go bad before reaching a store. Later on this year, the system will be expanded to work with nonperishable foods also.

How AI Can Help With Food-Supply Management

There are many different sources motivating the person with the CIO job to start to take a look at using AI to improve how the grocery chain interacts with food suppliers. The growth of online grocery services is fundamentally changing how grocery stores operate. The person in the CIO position has to understand that they need to bring more technology into their inventory management and procurement operations. The arrival of in-store pickup of grocery items that have been ordered online is starting to put more and more pressure on grocery supply chains.

There are three different things going on at grocery stores all at the same time. The stores are trying to get their suppliers to deliver more of their goods on time to the stores. At the same time they are trying to reduce their inventory levels in order to get a better handle on their spending. While all of this is going on, the grocery stores also have to find ways to keep their shelves stocked. The use of the new AI-based replenishment systems allows the grocery stores to improve their inventory precision and has allowed them to reduce the amount of extra stock that they need to keep on hand.

The AI systems that the grocery stores are implementing incorporate functionality that used to be spread over multiple systems. Additionally, the software can automate some previously manual steps such as having to check the current inventory levels in stores. The software is sophisticated enough to allow order quantities to be updated on a daily basis. These updates can be updated based on changing conditions such as weather or if a product was turned away at the warehouse. These software products are showing their value by moving products through distribution centers faster and limiting the amount of food that is near the end of its life that is sent out stores only to have to be thrown away.

What All Of This Means For You

One of the biggest challenges that grocery store CIOs face on a daily basis is the challenge of finding ways to make sure that the right food is in the right store at the right time. In order to make this happen, they need to make sure that they place the right orders with the right suppliers and that the food that has been ordered shows up on time. All of this used to be done by hand, but now it’s being automated using AI-based algorithms.

The reason that grocery store CIOs are willing to invest the time and energy into implementing AI based supply chain software is because it will allow them to better predict customer demand and get perishables onto store shelves faster. This software provides CIOs with a single view of their stores and the inventory within them. It will take time for this software to be rolled out. Grocery store CIOs are motived to make these changes because the arrival of online ordering and in-store pick up of groceries has put strains on the supply chain. Grocery stores need to find ways to get more goods to their stores on time, reduce inventory, and keep their shelves stocked. The new systems consolidate many existing systems and they allow orders to be constantly updated based on new information.

The lifeblood of a grocery store is its inventory. It is the responsibility of the CIO to make sure that the shelves in the stores are always fully stocked with the products that their customers want to buy. This has always been a challenging task to try to accomplish and the arrival of online grocery shopping has only made things worse. CIOs are dealing with this challenge by implementing new AI software that can do a better job of forecasting demand and placing accurate orders. The challenge will be to get the systems implemented correctly and then ensure that they operate correctly. If grocery store CIOs can accomplish this, then their stores should remain well stocked even as demand grows.

– Dr. Jim Anderson Blue Elephant Consulting –
Your Source For Real World IT Department Leadership Skills™

Question For You: Do you think that grocery store CIOs also have to convince their supplier partners to automate at the same time?

Click here to get automatic updates when The Accidental Successful CIO Blog is updated.
P.S.: Free subscriptions to The Accidental Successful CIO Newsletter are now available. Learn what you need to know to do the job. Subscribe now: Click Here!

What We’ll Be Talking About Next Time

Hey look – a customer is showing up at your company’s online web site. They took a look at the company’s catalog. Now they are placing an order. Are they a real customer? Are they a bot? Will they ever actually pay you? As the person with the CIO job it is your responsibility to evaluate your online customers. In order to make this happen, you are going to have to come up with a new type of metric that will allow you to determine if your customer can be trusted.