Supervalu and Chiquita, a category-leading manufacturer of packed fresh vegetables, wanted to reduce the very high levels of shrink and out-of-stocks that stores were experiencing in the value-added salad category. They also wanted to maximize sales and help as many shoppers as possible try new items during the introductory period. Supervalu and Chiquita launched a new project to achieve these goals, focusing initially on 12 items at 15 warehouses and the stores serviced by those warehouses, and choosing Market6 as their partner for the initiative.
Supervalu deployed Market6’s Store Order Portal and began using recommended order quantities, driven by the Market6 forecast engine, to create baseline store orders. These orders were then combined with feedback from store managers and supply chain leaders to drive actual shipments to stores. This approach permitted inventory adjustments to ensure optimal ordering while also increasing order accuracy. The new systems also provided daily mobile device alerts, weekly diagnostic reports, and monthly scorecards to ensure the new ordering process continued to meet shopper demand while also minimizing shrink and ensuring supply-chain efficiency.
Supervalu’s new Market6-based store ordering system generated savings from reduced shrink and lower out-of-stocks equal to 5% of value-added salad retail sales, which were $230 million at that time. Additionally, by providing more accurate and timely ordering suggestions, the new system reduced volatility in demand throughout the supply chain and enabled net improvement in freshness equal to two days of additional shelf life for value-added salad items. With the new platform, out of stocks fell by 25% while shrink was reduced by 33%.