Fresh Item Management and Product Production Management pilots have shown significant cost savings, and have driven sales dramatically in core fresh-food departments. However, the transition from pilot to production is complex, which according to some sources is why the technology, to date, has typically been deployed at a slow, methodical rate.
follow-through from HQ executives who sponsor these initiatives.
"It appears," said Langdoc, "that communications between those driving FIM initiatives from headquarters and the personnel at the store level are often pretty vague about objectives and milestones."
Because fresh department managers may not have a clear understanding of the concrete benefits of FIM, said Langdoc, they often resist the new systems as "something else from corporate rather than a tool for better planning and better sales."
Another challenge that has affected a swift, widespread deployment of FIM technology is integration. Some retailers are testing stand-alone solutions that need to be fully integrated into their existing point-of-sale, inventory receiving, and ordering systems to generate the highest savings.
"The big picture here is that retailers need a tightly integrated framework so they can extend the benefits of FIM to its fullest potential, linking inventories between different departments, making sure retailers are analyzing data in one place rather than in separate sovereign systems," said Langdoc.
Early in the piloting process, there were some concerns that FIM applications, because they require more recordkeeping at store level, might drive labor costs up significantly -- or that they might be too hard to use. Yet, these concerns seem to have been addressed and resolved.
"While there would be new processes and new activities necessary to do shrink management or production forecasting," noted Langdoc, "the savings from those activities would more than offset any incremental costs in time or labor."
