Digital Transformation Propels Grocery Outlet’s Highest Ever Order Fill Rate

Photo by Dennis Siqueira / Unsplash

Overview

  • Customer: Grocery Outlet
  • Industry: Retail / Grocery
  • Challenge: Improve ordering inefficiencies for 230 independently owned stores with dynamic inventories
  • Solution: Tablet-Based Ordering System
  • Outcomes: Cost reduction, simplified ordering process, organizational maturity, and supply chain efficiency

Summary

Grocery Outlet’s highly dynamic inventory and manual systems created ordering inefficiencies. To solve this, Apex developed and deployed a tablet-based ordering system based on the IBM BPM platform. Implementing BPM improved supply chain efficiency and order fill rates.

The Customer

Since 1946, Grocery Outlet has provided the food families love at a price they can afford. As America’s largest super value retailer, Grocery Outlet has built a vast and complex network of 230 stores. The Grocery Outlet network calls California, Idaho, Nevada, Oregon, Pennsylvania, and Washington home.

Grocery Outlet provides groceries to families in towns and cities of all sizes, serving all kinds of neighborhoods. Grocery Outlet prides itself on its local focus and is an active part of many varied communities. True to Grocery Outlet’s community values, many of Grocery Outlet’s stores are owned and operated by local families.

The Challenge

Grocery Outlet’s challenge comes from one of its biggest strengths: its buying process.

Grocery Outlet needed to increase efficiencies in its ordering system to improve productivity and speed up the ordering process.

Grocery Outlet excels at providing quality products that their customers enjoy at the lowest prices. To bring this to life, Grocery Outlet's expert buyers source product opportunistically. This complex buying method means that many products are sourced outside the normal retail channel. Buyers seek products through packaging changes, product overruns, and surplus inventories. These methods bring the best bargains straight to their customers.

The complexity of this system ensures that the best bargains are found, but also that products regularly change in and out. Finding products in this manner requires a unique and adept ordering system. The constant flow of product change requires highly responsive inventory management.

For many years, Grocery Outlet employed a paper-based batch-oriented store-ordering system. This system required hand-written notations. These notations would be manually entered into the computer system several times a week at each store. The system was time consuming and left plenty of room for error.

The dynamic nature of Grocery Outlet’s inventory created more challenges. The changing inventory meant that there was regular variation and inconsistent fulfillment. Because of these challenges, there was a need for ‘alternate ordering’ for many line items, adding even more complexity to the process.

The Apex Action

Apex Process Consultants followed the Apex method: Think, Execute, and Scale.

Apex kicked off by employing our Envisioning design process to understand the full scope of Grocery Outlet’s present state, needs, and wants.

Throughout the process, Apex worked in close collaboration with the Grocery Outlet team. Our Envisioneers first identified Grocery Outlet’s needs. We analyzed the Grocery Outlet ordering journey to identify optimization opportunities.

Next, our Envisioneers synthesized this information to identify the right fit to solve Grocery Outlet’s complex challenge. Once we identified the solution, we got right to work on moving the company through the execution and scaling processes.

Apex Process Consultants identified IBM Business Process Management (BPM) for Grocery Outlet. Our consultants drove and advised the development and deployment of a tablet-based store-ordering application in BPM.

Once the Apex and Grocery Outlet teams built out the IBM BPM process, the solution scaled out to all stores for maximum reach and efficiency.

The Solution

Apex developed a tablet-based ordering application to streamline Grocery Outlet’s processes. This application is built on the IBM Business Process Management (BPM) platform.

IBM BPM is the industry leader at turning models into working automated processes. Apex consultants implemented the BPM platform to model and improve business processes.

Apex and Grocery Outlet teamed up to build the User Interface using the Apex Coach Views toolkit. The new User Interface served to significantly speed up development and deployment time.

To drive scale, Grocery Outlet now uses Custom Order Windows for each of the client's stores. Custom Order Windows enable Grocery Outlet stores and buyers to see item availability, sales margins, and other relevant data. What’s even better, this information all comes through in real time, a big upgrade from the previous manual entry system.

The Results

The solution positively impacted Grocery Outlet’s productivity and reduced costs. It also empowers each store to buy products in an innovative way. Apex’s consultants left lasting impacts on Grocery Outlet to help drive continued innovation, growth, and digital transformation.

Apex’s IBM BPM solution achieved the following benefits for Grocery Outlet:

  • Streamlined the ordering process
  • Reduced errors and associated costs
  • Order fill rates increased from the low 90’s to over 98% - an ‘all-time high’ for Grocery Outlet
  • Improved ordering decisions with the ability to incorporate sales information in real time

New capabilities:

  • View blended margin percentages
  • Visualize the weight and cube of a truck as an order progressed

IT organization maturity

  • Learned how to perform Agile development
  • Implemented new business rules to support an aggressive growth plan
  • Introduced a new integration platform to improve supply chain efficiency

Apex used innovation to simplify the complex for Grocery Outlet. Ready for your own digital transformation to save costs and grow your business?

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Nick Laughton

Nick Laughton