CHICAGO -- A concerted effort is necessary if supermarket retailers are to achieve any success at reducing the number of damaged and otherwise unsalable products in their grocery stockrooms.
Members of the Joint Industry Task Force on Unsalables gave a preliminary report on the best practices for managing such products at a seminar here as part of the Food Marketing Industry's annual convention. The group's final report is scheduled to be published in July.
The panel outlined 14 best practices for handling of unsalables, seven for retailers and wholesalers and seven for manufacturers and brokers. The final report is expected to include 80 suggestions.
"We wanted to assemble some current and existing, proven control methods for manufacturers, retailers, wholesalers and brokers," said Daniel Raftery, vice president of Willard Bishop Consulting, Barrington, Ill.
The first best practice mentioned for retailers is to conduct regular focus groups with employees in each warehouse and functional area. Michael McCarthy, FMI's manager of research, said the people who best understand causes of damage are the ones who see it happening. They are often a good source of information.
The second practice is to establish warehouse damage committees. Two types were suggested. One is an executive steering committee comprised of all the warehouse superintendents. The second type is led by a warehouse superintendent, but is comprised of a cross-section of warehouse employees.
The third practice is to refrain from top-loading single cases on palletized loads. The panel members reported maximizing truckload cube at the risk of increased damage is not a smart business practice.
The use of videotapes and creative backroom-warehouse signs was the fourth practice suggested. These methods should be used to train employees how to properly handle salable products and prevent damage and how to handle and ship unsalable products.
The publication of a reclamation center newsletter for all retail stores was also suggested. Routine review of unsalables cost-reduction ideas will keep the subject on employees' minds and reinforce management's interest.
The task force also suggested formal damage-reduction goals in annual objectives and performance appraisals to focus employee attention and increase effort.
The final retailer best practice mentioned was to deny stores unsalables credits for incorrect items sent to the reclamation center. Feedback is required to change undesirable and costly habits, McCarthy said.
Dick Alt, director of national accounts and trade relations for Dial Corp., Phoenix, referred to a study conducted by the task force that tested the use of mobile scanners in the administration of unsalables.
He said the preliminary test results found crushed-dented packages appear to be the largest unsalable problem. Damages such as leaks, expired and improperly sealed mean about one-third of the products can't be used by food banks, he added.
"The second key finding is that although high-volume stores are more efficient on average, store size is not a universal factor in predicting unsalable volume," Alt said.
He said stores with high unsalable rates generally have more backroom stock, often stack backroom stock in ways that crush or otherwise cause damage and usually regard unsalables as a very low priority.
