Will AI transform Ahold Delhaize’s fresh food supply chain?
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.
- Ahold Delhaize USA Local Brands to Leverage New Supply Chain Solution to Offer Fresher Produce to Customers, However They Shop – Retail Business Services/RELEX Solutions/Globe Newswire
- Food Lion, Other Grocers Will Use AI for Food Suppliers – The Wall Street Journal
- Peapod, Stop & Shop Promise Fresher Product With New AI Inventory System –- Fortune
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?