E-grocery challenges and remedies: Global market leaders perspective

The purpose of the study is to identify logistic elements germane to e-grocery businesses, and to reveal the challenges collateral with each logistic element. Further, it strives to create a better understanding of specific remedies that have been employed by top e-grocery retailers to overcome existing challenges while aligning identified challenges with Turban’s framework. Extensive semi-structured interviews were conducted with management staff in three of the top ten global online grocery retailers and another that was a market leader in a European country. The qualitative data collected was transcribed and coded using a non-hierarchical axial coding to identify emerging themes in content analysis. The results expose a range of challenges that could be compartmentalised into three broad categories, in harmony with the different stages of the order fulfilment process. Interestingly, the study found that most challenges were operational rather than tactical or strategic in nature. While the study expands existing knowledge, its revelation that most challenges lie in the management of roles and responsibilities domain is instructive. This makes it imperative for practitioners to focus on this specific area if meaningful improvement in e-grocery retailing performance is to be realised. This research offers a systematic understanding of supply and distribution challenges, including remedies utilised to ameliorate the effect of the challenges from the perspectives of the top companies in the industry. These remedies can be invaluable for existing and emerging e-grocers

Assortment planning, space assignment and shelf location model

Introduction: Retailer’s operational decisions imply that through its assortment the demand can be satisfied achieving the highest possible profit making the best possible use of its exhibition space. This article presents a mixed integer linear programming model which main purpose is to maximize the profit of a retailer considering the effects of substitution between the items, space elasticity, service levels and buyer’s decisions. Objective: To propose a decision model for space allocation, assortment planning and shelf location for a retailer. Method: First different factors that affect the decisions under study are analyzed using primary and secondary sources. Then the formulation of the model is proposed and its performance is evaluated using real data from a product category at a retailer’s point of sale. Results:  For the test instance, the optimal solution was obtained in a reasonable computational time and the solution presents the best way to manage the assortment at the point of sale, improving the results of the current method. Conclusions: The proposed model allows increasing the profitability of the chain through the selection of the appropriate assortment, with fair exhibition spaces and suggesting the exact location of the items.Introducción: Las decisiones operativas de un minorista implican que a través de su surtido se pueda satisfacer la demanda logrando la mayor utilidad posible haciendo el mejor uso posible de su espacio de exhibición. Este artículo presenta un modelo de programación lineal entera mixta cuyo propósito es maximizar la rentabilidad de un minorista considerando los efectos de sustitución dinámica entre artículos, impactos de la elasticidad del espacio sobre la demanda, niveles de servicio esperados de la exhibición y las decisiones de los compradores. Objetivo: Proponer un modelo que soporte la toma de decisiones de asignación de espacio, planeación del surtido y localización en góndola de un minorista. Metodología: Primero se analizan diferentes factores que afectan las decisiones objeto de estudio usando fuentes primarias y secundarias. Luego se desarrolla el modelo matemático y se evalúa su desempeño utilizando datos reales de una categoría de productos en un punto de venta de una cadena de supermercados. Resultados: En la instancia de prueba se obtiene la solución óptima en un tiempo computacional razonable y esta solución permite establecer la forma en la cual gestionar de mejor manera el surtido en el punto de venta, superando los resultados del método actual. Conclusiones: El modelo propuesto permite aumentar la utilidad de la cadena a través del surtido adecuado, con los espacios de exhibición justos y con la localización exacta de los artículos seleccionados

Modelo para la planeación del surtido, asignación de espacio y localización en góndola

Introduction: Retailer’s operational decisions imply that through its assortment the demand can be satisfied achieving the highest possible profit making the best possible use of its exhibition space. This article presents a mixed integer linear programming model which main purpose is to maximize the profit of a retailer considering the effects of substitution between the items, space elasticity, service levels and buyer’s decisions. Objective: To propose a decision model for space allocation, assortment planning and shelf location for a retailer. Method: First different factors that affect the decisions under study are analyzed using primary and secondary sources. Then the formulation of the model is proposed and its performance is evaluated using real data from a product category at a retailer’s point of sale. Results:  For the test instance, the optimal solution was obtained in a reasonable computational time and the solution presents the best way to manage the assortment at the point of sale, improving the results of the current method. Conclusions: The proposed model allows increasing the profitability of the chain through the selection of the appropriate assortment, with fair exhibition spaces and suggesting the exact location of the items.Introducción: Las decisiones operativas de un minorista implican que a través de su surtido se pueda satisfacer la demanda logrando la mayor utilidad posible haciendo el mejor uso posible de su espacio de exhibición. Este artículo presenta un modelo de programación lineal entera mixta cuyo propósito es maximizar la rentabilidad de un minorista considerando los efectos de sustitución dinámica entre artículos, impactos de la elasticidad del espacio sobre la demanda, niveles de servicio esperados de la exhibición y las decisiones de los compradores. Objetivo: Proponer un modelo que soporte la toma de decisiones de asignación de espacio, planeación del surtido y localización en góndola de un minorista. Metodología: Primero se analizan diferentes factores que afectan las decisiones objeto de estudio usando fuentes primarias y secundarias. Luego se desarrolla el modelo matemático y se evalúa su desempeño utilizando datos reales de una categoría de productos en un punto de venta de una cadena de supermercados. Resultados: En la instancia de prueba se obtiene la solución óptima en un tiempo computacional razonable y esta solución permite establecer la forma en la cual gestionar de mejor manera el surtido en el punto de venta, superando los resultados del método actual. Conclusiones: El modelo propuesto permite aumentar la utilidad de la cadena a través del surtido adecuado, con los espacios de exhibición justos y con la localización exacta de los artículos seleccionados

Demand Estimation at Manufacturer-Retailer Duo: A Macro-Micro Approach

This dissertation is divided into two phases. The main objective of this phase is to use Bayesian MCMC technique, to attain (1) estimates, (2) predictions and (3) posterior probability of sales greater than certain amount for sampled regions and any random region selected from the population or sample. These regions are served by a single product manufacturer who is considered to be similar to newsvendor. The optimal estimates, predictions and posterior probabilities are obtained in presence of advertising expenditure set by the manufacturer, past historical sales data that contains both censored and exact observations and finally stochastic regional effects that cannot be quantified but are believed to strongly influence future demand. Knowledge of these optimal values is useful in eliminating stock-out and excess inventory holding situations while increasing the profitability across the entire supply chain. Subsequently, the second phase, examines the impact of Cournot and Stackelberg games in a supply-chain on shelf space allocation and pricing decisions. In particular, we consider two scenarios: (1) two manufacturers competing for shelf space allocation at a single retailer, and (2) two manufacturers competing for shelf space allocation at two competing retailers, whose pricing decisions influence their demand which in turn influences their shelf-space allocation. We obtain the optimal pricing and shelf-space allocation in these two scenarios by optimizing the profit functions for each of the players in the game. Our numerical results indicate that (1) Cournot games to be the most profitable along the whole supply chain whereas Stackelberg games and mixed games turn out to be least profitable, and (2) higher the shelf space elasticity, lower the wholesale price of the product; conversely, lower the retail price of the product, greater the shelf space allocated for that product

Otimização de um sistema de reaprovisionamento de encomendas entreposto-lojas

Dissertação de mestrado em Engenharia IndustrialCom este trabalho pretende-se encontrar soluções que melhorem o reaprovisionamento de encomendas em diversas lojas de retalho especializado, espalhadas em diversos pontos do País. As opções estudadas vão no sentido de determinar uma frequência de entrega às lojas, mais adequada do que a atual. Pretende-se evitar que as mesmas entrem em rotura dos seus artigos, mas ao mesmo tempo conseguir uma maior rentabilidade nas operações do entreposto que as abastece. Nomeadamente procura-se obter uma maior agregação de encomendas por entrega, uma maior rentabilização do espaço dos camiões e um menor número de entregas por loja, o que se traduz numa poupança direta em combustíveis e numa cadeia de abastecimento mais verde. Numa primeira fase, procedeu-se a uma análise conducente a um maior equilíbrio nas curvas de preparação dos entrepostos, ou seja, que o volume de encomendas a preparar nos diferentes dias da semana fosse o mais uniforme possível, reduzindo-se assim significativamente os anteriores problemas de afetação de recursos humanos. O indicador chave nesta análise é a amplitude verificada entre os volumes de preparação nos diferentes dias da semana, antes e depois da respetiva implementação da solução preconizada. Numa segunda fase, por forma a melhorar o serviço prestado às lojas, estudou-se a possibilidade de implementar abordagens alternativas de reaprovisionamento. Estas, basearam-se na diferenciação entre artigos Premium, que devam passar a ser preparados todos os dias, e artigos não Premium, que devam passar a ser preparados menos frequentemente. Agregada a esta ação, estudou-se uma redefinição do layout destes artigos, que minimize os trajetos dentro do entreposto. Os indicadores chave desta ação são a taxa de ocupação do entreposto por secção, a produtividade no picking e os tempos de arrumação dos artigos nas prateleiras das lojas. Algumas das soluções propostas foram adotadas pela empresa e estão atualmente operacionais. As poupanças estimadas por ano, como resultado destas novas soluções, rondam os 250 mil euros, só em transportes: 35 mil euros no entreposto de artigos de desporto (2,09% do orçado para 2012), 120 mil euros no entreposto têxtil (14,25% do orçado para 2012) e 95 mil euros no entreposto de eletrónica (4,6% do orçado para 2012).This work aims to find solutions that improve replenishment orders on several specialized retail stores, located in Portugal. The main goal of this study was to find an optimal number of deliveries to stores that allow them to not experience stockout, but also enabling greater profitability of the operations at the warehouse. As a result of this work it is expected: orders’ largest aggregation for delivery, better use of space in the trucks and fewer deliveries per store, which outcomes in direct savings in fuel and a greener supply chain. The basic idea of the work was to achieve a better balance in preparation curves in the warehouses, meaning the volume of orders to prepare in the different days of the week were as stable as possible, so that it won´t exist the current problems of assignment of human resources. The key indicator in this work is the amplitude observed between the volumes of preparation on different days of the week, before and after work. Subsequently, after been reduced the number of deliveries per week to the stores, and aiming to improve the service to them, it was studied the possibility of alternative approaches of replenishment. Those were based on differentiation between: Premium articles, which must now be prepared every day, and not Premium articles, which must now be prepared less frequently. Aggregated to this action, it was studied a redefinition of layout of the warehouse that minimizes the paths inside the warehouse. The key indicators of this action are: occupation rate in warehouse per section, productivity in picking and a faster storage of items on presentation space on stores. Some of the proposed solutions have been adopted by the company and are currently operational. The estimated savings per year are around 250 thousand euros, only in transport: 35 thousand euros in the warehouse sporting goods (2,09% of 2012 budget), 120 thousand euros in the warehouse textiles (14,25% of 2012 budget) and 95 thousand euros in electronic warehouse (4,6% of 2012 budget)