Centralised Grocery Supply Chain Planning: Improved Exception Management

Purpose - The purpose of this paper is to present an operations model for retail replenishment collaboration and identifies its expected benefits and limitations for the members of a grocery supply chain.Design/methodology/approach - A case study is conducted on a development project between a grocery wholesaler and two grocery product suppliers. Data are collected through semi-structured interviews with key respondents from four different companies.Findings - Despite advances in collaborative practices in grocery supply chains, retail store replenishment management faces challenges. In particular, demand exceptions management is a challenge in the grocery industry. A replenishment model called Collaborative Buyer-Managed Forecasting (CBMF) creates a proactive planning approach and a platform for close collaboration in the supply chain. The centralised forecasting transforms retailer sales data into a plan which serves the whole supply chain by creating one-order forecast. The CBMF model facilitates efficient demand management, improves demand responsiveness and promotes better availability of products in retail stores.Research limitations/implications - CBMF provides a replenishment planning model for the whole supply chain. It is tested to a limited extent in one supply chain.Practical implications - The study provides managers with a better understanding of the benefits of centralised forecasting and closer replenishment collaboration, especially during periods of exceptional demand.Originality/value - A new approach for managing demand in grocery supply chains with centralised forecasting is provided.