A new inventory management solution developed by Celonis and Peech has been launched to help retailers and consumer packaged goods companies reduce waste and revenue loss from perishable goods.
The product, called the Celonis Inventory Lifecycle Optimisation app, is designed to enhance how businesses manage perishable items, including fresh produce and baked goods, by improving the effectiveness of price markdowns before products reach the end of their shelf life.
Price adjustments for perishable goods are a key part of inventory management and have a direct impact on reducing unnecessary food waste. However, existing inventory management systems often lack mechanisms to track whether established markdown procedures are being correctly followed. This gap can lead to missed markdown opportunities, resulting in product disposal that diminishes stock and affects revenue.
New inventory solution from Celonis and Peech enables retailers to reduce perishable goods losses
Retailers and consumer packaged goods companies will be able to reduce product waste and lost revenue with the launch of a new solution co-developed by Process Mining leader Celonis and tech company Peech.
The Celonis Inventory Lifestyle Optimisation app optimises the process of managing perishable inventory.
Adjusting, or marking down, the price of products with a limited shelf life, such as fresh produce and baked goods, is a critical aspect of inventory management. It’s also critical for reducing food waste.
Traditional inventory management systems can identify perishable products that are at risk of expiring, but they lack the ability to track adherence to standard markdown processes. Missed markdown opportunities can result in needless product disposal, which leads to inventory loss (or shrinkage) and negatively affects revenue.
Dean Tarpley, Industry Principal for Retail & CPG at Celonis, said retail and CPG’s incredibly tight margins leave no room for operational inefficiencies.
“The Inventory Lifecycle Optimisation app enables organisations to identify process improvement opportunities, take action to increase markdown adherence, and monitor the effectiveness of those efforts.”
Anmol Gupta, Founder and CEO of Peech, said: “By bringing Celonis Process Intelligence to the inventory lifecycle process, we were able to create a solution that lets retailers and CPG companies answer the question, ‘Did we do everything possible to sell the inventory before it goes bad?’ whether it’s a loaf of bread on the grocery store shelf or cosmetics waiting for delivery in the warehouse.”
A leading global retailer that is using the solution to minimise shrink in perishable inventory, has improved its sell-through rate by 2% leading to a projected $35 million in recaptured revenue.
The company, which has more than $200 billion in annual revenue, found that its stores were not properly executing against defined processes for discounting limited shelf-life goods within bakery, meat, prepared foods, and other departments. Non-adherence was leading to lost sales opportunities, increased wastage, and compliance risks.
Using the Inventory Lifecycle Optimisation app, regional managers are now able to identify products, stores, and departments falling behind regional benchmarks in program compliance. They can also get insights on a weekly basis to guide staff conversations for markdown process adherence improvement. The solution is being scaled across 4,000 stores and the company expects meaningful gains in process compliance.
The app identifies and quantifies missed revenue opportunities by tracking markdown adherence and highlighting areas for improvement. It provides:
The app is the latest addition to the Celonis Platform Apps Program, enabling companies to quickly realise value with solutions built by ecosystem partners on the Celonis Process Intelligence Platform.
