Wipe Out Order Inaccuracy

An upgrade to Associated Grocers' merchandise management system eliminated a $2 million replenishment glitch.

According to the Bureau of Labor Statistics, there are more than 85,000 grocery stores in the United States. Of the 85,000 stores, 80% are small, employing fewer than 50 workers. Many grocery employees, especially at small stores, are inexperienced and young – 32% are age 16 to 24. Considering high retail store-employee turnover rates (many 80% or higher), a young, unpredictable workforce challenges many stores. Systems, however, can relieve retailers of this inherent workforce burden. Streamlining inventory and stock ordering processes, for instance, can diminish training time and improve the overall accuracy of orders. Inaccurate orders affect processes beyond those in stores, reaching into warehouse and supplier operations. Associated Grocers of the South, Inc. (AG South) provides an example of a grocery operation that used technology to empower store associates and improve order accuracy.

AG South is a $413 million grocery cooperative that has served its member grocers since 1927. It delivers groceries, dairy products, frozen foods, meat, and produce to 300 small grocers (i.e. 2 to 10 checkout lanes) in five states in the southeast United States. It offers more than 16,000 food-item SKUs, which include Shurfine private-label products, as well as another 20,000 cross-docked health and beauty item SKUs. The company experienced several problems with incoming orders from stores and sought to improve the correctness of orders received. Ron Burke, VP of IT at AG South, explored the causes of order inaccuracies.