Food Lion expands pilot program that supplies vendors with information on store-level inventory, sales, instead of information about transfers from distribution centers to stores; move improves in-stock levels and reduces reclaim, inventory costs

Cindy Allen

LOS ANGELES , February 7, 2012 (Industry Intelligence) – After the conclusion of a successful pilot with PepsiCo Inc., Food Lion has expanded a program in which it provides vendors with information on store-level inventory and sales rather than merely providing them with information about product transfers from distribution centers to stores, Supermarket News reported Jan. 30.

Scott Craig, Delhaize America’s director of supply chain, said that the program improved in-stock levels, and reduced reclaim and inventory costs.

He added that the inventory in Food Lion’s distribution centers was reduced by 12%-27%. Out-of-stock levels at the distribution centers were reduced by 21%-77%, while out-of-stocks levels at stores were reduced 20%.

Some of the reductions could be due to a “rapid replenishment” program that was implemented as part of the pilot, Craig noted.

“We’re moving to a consumer-driven supply chain,” said Scott Craig at the Grocery Manufacturers Association and the Food Marketing Institute’s Supply Chain Conference last week, “And if you’re serious about a consumer-driven supply chain, you’ve got to react to what the consumer wants and to forecasts of consumer demand as opposed to just reacting to pulls from the warehouse [to stores].”

Craig said that, with Pepsi, Food Lion intends to expand the point-of-service replenishment plan to encompass all non-direct-store-delivery products, and that Food Lion is currently operating pilot point-of-service replenishment plans with six vendors.

The primary source of this article is Supermarket News, New York, New York, on Jan. 30, 2012.

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