How an 8-week focus on Assortment, Inventory & Replenishment (AIR) outlined a path to an incremental 33% of Online Demand Fulfilled from the MFC
Introducing the Takeoff Grocery Automation Solution
Growing demand for online grocery presents grocery retailers with new costs and logistical challenges. At Takeoff, we help grocery retailers fulfill online orders without compromising on price or speed. Takeoff’s unique micro fulfillment platform is an end-to-end solution that combines hardware, software, cloud orchestration, maintenance, and ongoing partnership with our client, the grocer. This partnership with retailers is key to success -- we collaborate with our clients’ teams to integrate the Takeoff solution, monitor performance, and implement strategies to help our clients reach their goals.
Our Plan to Optimize AIR with Grocery Automation
One such opportunity for collaboration presented itself when one of Takeoff’s North American retail partners expressed that they wanted to optimize the assortment, inventory, and replenishment (or “AIR”) performance of their micro fulfillment center (MFC). In order to offer an exceptional experience for their customers, our client needed to ensure that they were focusing on the right products, that these products remained in-stock, that they were of the highest quality, and that they were fulfilled from the optimal area within the MFC.
Our client already had many AIR initiatives in flight and were seeing positive results; however, they wanted to take a more holistic approach to ensure they were taking advantage of all possible opportunities, and that they could easily communicate these opportunities to gather internal support and alignment.
That is where Takeoff’s Operational Excellence team came in.
Determining the Scope of the Project
Our Operational Excellence (OpEx) Team focuses on unlocking productivity, to ensure that our clients are getting the most out of our solution. Our OpEx team, in collaboration with our client and Takeoff’s Customer Success team, developed an 8 week grocery automation Roadmap Development Project.
In order to be successful, we identified these key steps:
- KPI benchmarking: Using data from Takeoff’s network of sites, as well as industry standards, we identified high-level areas for improvement where KPIs were underperforming.
- Discussion of known obstacles and opportunities: Over the course of multiple deep dive sessions, Takeoff and our client’s teams created a detailed and exhaustive list of challenges to AIR performance.
- Calibrating for success in a grocery MFC environment: We aligned, framed and conducted analysis to size each initiative based on how they would directly impact existing KPIs such as % of Demand From the Core MFC, In-stock Rate, Days on Hand, and more.
- Establishing priority: Using estimated impact and level of effort, we mapped out the relative priority of our initiative list.
“We regularly experience the complexity of Assortment, Inventory & Replenishment (AIR) management for online retailers. Day-to-day MFC management is already nuanced and time-consuming, so structural improvements and opportunity mapping often represent an effort that clients simply do not have time for. It is exciting to work with retailers who want to take their AIR performance to the next level, and who may only need the benefit of added resources and attention.” – Senior Manager, Takeoff’s Operational Excellence team.
Process Mapping 23 Initiatives
To kick off the project, Takeoff’s OpEx team collaborated with key stakeholders and our client’s subject matter experts (SMEs) to understand their projects in flight, as well as backlogged initiatives worth further investigation. During this process, OpEx referenced case studies from across our 13 existing clients, internal SME engagements, and additional analytics from our Operational Excellence team.
From here, this Takeoff and client working group identified 23 discrete initiatives. OpEx leveraged Takeoff’s proprietary database as well as industry benchmarks to determine the size of the prize for each initiative based on impact on in-stock, inventory accuracy, inbound timing, assortment, or promotional strategy. Using process mapping and solution workshops with the relevant stakeholders at our retail client’s company, all initiatives were ranked based on the level of effort needed to capture the full value.
An Opportunity Map helped visualize each initiative’s ratio of impact to level of effort, which gave Takeoff and our client a holistic view of Quick Win opportunities, strategic initiatives, and lower priority considerations.
Through additional working sessions with stakeholders, our Operational Excellence team identified additional considerations for prioritization of initiatives: which teams and SMEs could be recruited for help with multiple initiatives, and which would pay dividends for business outside the walls of the MFC? The result: a 5-phase approach to facilitate focused execution and a framework for broader communication.
Unlocking Improvement for our End Client
“This work will be invaluable to us moving forward. We get asked for a lot of stuff… business cases, level of effort, what’s needed to unlock improvements. And now we have it all in our back pocket. - Director, Supply Chain, Takeoff’s Client
We were thrilled with the results of our project and the benefit that it unlocked for the client. All-in, our Operational Excellence team identified and sized 23 discrete initiatives. Collectively, these amounted to an incremental 33% of Online Demand Fulfilled from MFC. Across all of these initiatives, we have a clear picture for the opportunity or known restrictions of 96% of the total demand, with only 4% of demand not tied to known initiatives with clear objectives.
In addition to the road mapping exercise, the team also supported the roll-out of key initiatives, including launching Takeoff’s Assortment Management Platform* and establishing the right ownership and processes for effective ongoing use. Finally, our working team as well as our client’s generated documentation to continue to track Next Steps and guide discussions with known stakeholders to develop corporate alignment.
Takeoff's Assortment Management Platform provides regularly-refreshed recommendations for the optimal fulfillment location of each product in a retailer's assortment. Part of Takeoff's core TOM UI, AMP simplifies and optimizes the complex decision making process of assortment management for an online retailer.
“This will push things further and faster. You’ve given us a lot to make us successful in the next 6-8 months, and now it’s up to us to do this justice.” - Director, Supply Chain, Takeoff’s Client