Booths specialty supermarket with new supply chain management

08/01/2016

By using the supply chain management software, Booths reduced food spoilage by ten percent and even twenty percent in the refrigerated food category.  What’s more, thanks to the SCM system, Booths strengthened its position among the Top 3 British supermarkets with the highest level of availability.

Lancashire cheese, Cumberland Rum Nicky or cured Isle of Man kippers – the supermarket chain Booths from North West England is known for these types of regional delicacies. Featuring 30 stores, the medium-sized family-owned company prefers to work with small farms and regional manufacturers.

Supermarket Booth

Fresh regional specialties: Booths prefers to collaborate with small farms and manufacturers, setting itself apart from the large supermarket chains

To be able to deliver freshly harvested potatoes to Booths, the farmers need to get up in the middle of the night. After all, the smooth white skinned “Maris Bard“ type needs to be harvested in the early hours of the morning if it is going to be available at the same day in stores of the supermarket chain with its central office in Preston. A quest for fresh food that doesn’t just challenge the sleep pattern of farmers but also tests the supply chain management at Booths. “The farmer receives the order at 5:30 am via email. He subsequently harvests the potatoes, delivers them to us and we offer them in our stores in the afternoon, “explains Andrew Rafferty, Head of IT and eCommerce at Booths. To set itself apart from the large supermarket chain competitors, the company that has been family-owned since its foundation in 1847, relies on regional, seasonal and especially fresh products.

That’s why Booths sources its products from local suppliers and producers. Previously, Booths had faced big challenges to always obtain the right quantities of these highly perishable groceries for optimal presentation and availability in its stores. The medium-sized company had a hard time negotiating daily deliveries. Added to this were difficulties with campaign management. Last but not least, the allocation process from the three distribution centers to the 30 stores with their varying product selections was supposed to be optimized. To be able to satisfy its own quest for always (harvest) fresh quality products, Booths went in search of a suitable SCM software.

Seeking a flexible solution

Software flexibility was the determining factor in the choice of supplier. Finnish provider RELEX Solutions offers its system in the form of a SaaS solution (Software as a Service). This way, Booths did not have to purchase any hardware or pay license fees but only needed to invest in system use and service. The fixed monthly SaaS fee guarantees the full system, regular upgrades, and customer support. There was also no contractual obligation to continue after the pilot phase was completed. What’s more, the software can be simply connected to all commercially available ERP systems. The system was first tested for refrigerated foods since it was particularly important for Booths to reduce spoilage and waste. The SCM software was successful after only a brief amount of time, prompting Booths to expand the project to the frozen and fresh produce areas. On the whole, spoilage was reduced by ten percent and in the refrigerated category even by 20 percent within six months. Availability was considerably increased with the help of the RELEX solution. The British trade magazine “The Grocer“ repeatedly voted Booths in the Top 3 of British supermarkets.

Rollout after just four months

The full rollout into all stores took place only four months after implementation. The software also simplified the supply chain management processes. The same is true for the fresh food supply management processes. “The biggest challenge for our fresh food area was the ordering deadlines in the early morning hours,“ says Rafferty. For the aforementioned regional type of potato to be available in the Booths stores by the afternoon, the order needs to be placed with the farmer by 5:30 am at the latest. This is where the benefits of the RELEX software really become obvious. First, the ordering processes are automated. Second, the demand forecasting is far more accurate than estimates because the system calculates the demand based on historical sales data and patterns at the store level, weather profiles, seasonal factors and shelf life data.

hand holding fresh potatoes

To offer fresh product a well planned logistical organization is needed

Internally-developed big data database

The data volumes are stored in a big database that the software accesses and uses as a foundation to create accurate forecasts of demand in real time. This real-time analysis is made possible by an internally-developed column-oriented database. The column layout ensures an extreme compression of the scores of data sets. The database can thus be run in-memory, meaning it relies on main memory for storage. This way, large data volumes are processed more than 100 times faster than is the case with conventional systems – a performance improvement that allows for daily forecasts and order proposals on a product-store level.

The system recognizes changes in demand in real time and avoids unnecessary ordering, remaining inventory and spoilage. While the unpredictable weather in North West England previously made demand forecasting very difficult, the RELEX solution now makes it possible to quickly and immediately respond to changes in the weather. To do this, the software collects weather-related sales data and creates profiles using it as a basis. Store-based sales data during a heat wave is being analyzed for example and the derived profile can then be applied in the case of a sudden heat wave for example, as a template for the store-specific demand and distribution.

“We are now better able to forecast the demand at the SKU level, “says Rafferty. Booths‘ campaign management could also be improved thanks to the RELEX solution. Store display and promotional presentations are important factors in promoting sales in the food trade – between 20 and 35 percent of sales are generated by sales promotions and product campaigns. The RELEX solution was also able to effectively assist Booths in this area. The software analyzes data from different product campaigns, identifies parallels and calculates forecasts for campaigns on similar products – a huge relief when it comes to product launches for instance.

Case study by RELEX Solutions GmbH; first published at iXtenso.com