Food is a vital component in the human kind’s survival – and assuring availability to the consumer is of utmost importance. With ever-increasing tendency customers’ power increase, leading to new trends in the industry hereunder, expanded service requirements, mass customization, customer loyalty, private labelling and new delivery options. Today, customers require wide variety of grocery products, low price, high quality and constant availability – and consequences can be fatal if not succeeding. What is more, amongst grocery food products, one group particularly distinguishes itself from other groups: frozen food products. Apart from traditional factors such as e.g. uncertainty and variation in demand and lead-time, frozen products also degrade constantly and certain product even have latent scarcity in supply. Hence, deteriorating from immediately after production, all post-handling is a constant race against time. Adding even further complexity is the differences in shelf life for the different products, ranging from months to years.
Thus, a key factor in fulfilling downstream requirements is the ability to assure that frozen products are constantly available, in right quantity, with right quality at right price. This entails significant pressure on the planning and controlling of replenishments throughout the supply chain. Moreover, since not being a production company and with no organisational link to outlets, the independent full-service wholesaler faces even greater pressure to assure high level of performance. To assure long-term survival and fulfilment of downstream requirements, wholesaler is ought to comply and respond through effective and efficient replenishment of products. Though several different methods exist for replenishment, neither seem to capture the particularities of frozen food products.
The aim of this thesis is to investigate replenishment planning and control of frozen food products. From this, to determine how wholesaler can assure effective decision-making and efficient replenishment across different products. This research includes operations’ relations to organisational context and competitive priorities, decision-making in replenishment planning and control, replenishment methodology and performance measuring. Through a single case study of one of Denmark’s largest grocery wholesalers, this gives an understanding of faced challenges, and further, how certain product particularities influence replenishment planning and control. By investigating current situation at case company, and, what is in concurrent academia, this research identifies and analyses differences and gaps.
This thesis suggests a concept for planning and controlling replenishments effectively and efficiently, based on regression-analyses of identified characteristics and clustering of products. The concept represents three classification-models, specific to the case of frozen products. These models identify relevant replenishment strategies, inventory management models and methods for demand forecasting the different products. Moreover, an evaluation-criterion is established allowing incorporation of the situations where assortment products are on campaign. The concept further encompasses long-term survival by proposing relevant and organisationally aligned performance measures. By using a product-differentiated approach to replenishment planning and control, the concept entails efficiency and effectiveness, ultimately enhancing the economic value added.