Will AI transform Ahold Delhaize’s fresh food supply chain?

Discussion
Photo: Giant/Martin's
Mar 29, 2019
George Anderson

How fresh is fresh? Apparently, the answer is quite a bit fresher than previously thought if you bring artificial intelligence into the grocery supply chain. Earlier this week, Ahold Delhaize, which owns Food Lion, Giant Food, Giant/Martin’s, Hannaford, Peapod and Stop & Shop, announced that it is rolling out an “end-to-end forecasting and replenishment solution” that uses AI to optimize supply chain performance.

Ahold Delhaize’s Retail Business Services unit revealed that the company has been testing the fresh distribution forecasting and replenishment system at its Food Lion and Hannaford chains since early last year. Based on the success of the pilots, the company has decided to roll out the solution across all its U.S. grocery chains and its Peapod home delivery business.

The Wall Street Journal reports that the two chains involved in the pilot were able to move fresh product to and through distribution centers more quickly, which meant that items on the shelf were less likely to reach their expiration dates. Unplanned shipments from suppliers were also down — 51 percent for fish and 44 percent for pork — resulting in fresher products in stores.

Chris Lewis, executive vice president of supply chain for Retail Business Services called the new system developed by RELEX Solutions “game changing” for Ahold Delhaize’s local banners.  

“Not only will it provide local brand stores with the flexibility they need to best serve their customers, it will enable a complete supply chain transformation at a time when customer expectations are rapidly changing the way groceries are bought, sold and delivered,” he said.

DISCUSSION QUESTIONS: How will artificial intelligence technology affect the supply chains of food suppliers and retailers in the next couple of years? Do you see the changes that will be brought by AI in the supply chain as being transformative for grocery operations?

Please practice The RetailWire Golden Rule when submitting your comments.
Braintrust
"This is a terrific AI use case that all grocery retailers either should be looking at or are doing already."
"AI in the grocery supply chain will deal with more variables than are humanly possible. The efficiencies will be huge, until … until you get to the shelf."
"One of the biggest opportunities is in reducing waste."

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7 Comments on "Will AI transform Ahold Delhaize’s fresh food supply chain?"


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Adrian Weidmann
BrainTrust

Visibility and transparency in the supply chain from the manufacturer or producer all the way through to the customer needs to be a fundamental element in order to meet customer expectations in omnichannel shopper journeys. I would be interested to understand where or how Ahold Delhaize is using Artificial Intelligence (AI) to achieve this transparency.

Gib Bassett
BrainTrust

This is a terrific AI use case that all grocery retailers either should be looking at or are doing already. It affects not just the waste factor, but also improves outcomes with customers. Note the pilot to production mention – generally regarded as best practice for AI and productionized analytics work. Given the apparent success, I wonder what other AI use cases the company will approach next? The one mistake they can make is stopping here.

Gene Detroyer
BrainTrust

AI is becoming more a part of everyone’s supply chain every day. A ship carrying a key competent in manufacturing an item is delayed by a storm. The system knows it and automatically changes the schedule at the plant to manufacture something else. No human is involved.

AI in the grocery supply chain will deal with more variables than are humanly possibly can The efficiencies will be huge, until…

That is, until you get to the shelf. The retailer will have to change the process of shelving items in the store. When you have a system that is perfect in getting the right product at the right time to the store, you better be ready to execute to get that product out to the shopper in a scheme that will change everyday.

We often have talked about “the last mile.” In this case, we must took at “the last 10 feet.”

Shep Hyken
BrainTrust

One of the biggest opportunities is in reducing waste. AI will help manage a number of areas that impact the supply chain. AI will help predict and manage consumer buying trends, growing trends, weather trends, etc. It’s not just about getting fresh food to the retailer to sell to the consumer. It’s also about reducing costs.

Brent Biddulph
BrainTrust
Ahold has been making some impressive moves as of late – all with data and AI as the central element. It was a real pleasure to hear from Frans Muller, CEO, Ahold, at Shoptalk this year, where he shared many such stories. Migrating the robust capabilities of demand forecasting and replenishment applications once reserved for shelf stable products to fresh foods is long overdue. For years, (even today for many grocers) fresh food replenishment remains a local, paper- (or phone call) based ordering process due to the complexity of the supplier network, and the dynamic nature of product availability in each local market. The upside of getting it right in the fastest growing grocery segment (fresh foods) has significant ROI implications. Data collaboration between retail and supplier trading partners will be crucial to success, and in combination with IoT (real-time feedback) and blockchain (source-to-shelf insights) – improving fresh food management seems to already be showing great promise for grocery leaders such as Ahold. After all, getting it right in the fastest growing segment of the… Read more »
Andre Shaw
Guest
On behalf of the project team, I want to thank you for your interest in this news and the thoughtful comments. The bottom line always for us is consumers. They are the heart of everything we do, and we are excited to start this journey to bring them fresher products with greater availability whether they choose to shop online on in store . Like many of you, we’re constantly evaluating new and emerging technologies and the benefit those can have for consumers. The news we shared about this work is just one example of how that’s coming to life, and we’ll have more to say over time, particularly in the supply chain space. I’m particularly excited to see this article and your comments because something very important to us is engaging with those outside of our business – whether that’s partners, start-ups, educational institutions or others – to discover the latest technologies and evaluate the business applications. Part of how we are trying to do this is through the creation of a new supply chain… Read more »
Oliver Guy
BrainTrust

This kind of approach has long been a dream — from my first work in this area in the early 1990s based on simple rules, the desire to make this more complex has been there.

What for me is particularly interesting to me about this is how it appears to be a true collaborative partnership between grocer and vendor — my feeling is that more of these are needed in order to make the leaps forward that are needed.

wpDiscuz
Braintrust
"This is a terrific AI use case that all grocery retailers either should be looking at or are doing already."
"AI in the grocery supply chain will deal with more variables than are humanly possible. The efficiencies will be huge, until … until you get to the shelf."
"One of the biggest opportunities is in reducing waste."

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