New research conducted by CHEP, Orlando, Fla., evaluated and compared the effectiveness of 48 strategies manufacturers and retailers use to reduce unsaleable goods and generate cost savings. Participants identified enhanced shelf life management, effective management of discontinued items and sharing of UPC-level data as among the most effective solutions.
“Unsaleable goods is a $15 billion issue for our industry, and a reduction of just 1% would save companies $150 million annually,” says Daniel Triot, senior director of Trading Partner Alliance, a joint industry affairs-industry relations leadership group formed by the Grocery Manufacturers Association, Washington, D.C., and the Food Marketing Institute, Arlington, Va. “By promoting broader adoption of the best practices CHEP has discovered, we can meet and exceed that goal.”
The data, based on in-depth interviews with retailer and manufacturer supply chain experts, uncovered proven unsaleables reduction best practices across multiple supply chain functions, including, warehousing, shipping and receiving, sales, merchandising and reverse logistics. Each solution was ranked on a 4-point effectiveness scale.
“Our research uncovered clear patterns for reducing unsaleable goods,” says Ben Eugrin, director of supply chain solutions for CHEP. “We now know how retailers, manufacturers and suppliers, working together, can generate significant cost-savings that positively impacts their bottom line.”