Labor turnover is costing grocers big bucks in poor production planning

The remedy? Production planning software, which helps eliminate excessive markdowns, high shrink and ineffectual workflows, while also helping retailers drive increased sales.

It costs a supermarket a minimum of $2,400 every time a store associate turns over and jumps up to $6,200 for a department manager. 


What isn’t included in these numbers is the expertise that a store loses, specifically accurate production planning knowledge. New and inexperienced staff are unfamiliar with local purchasing behavior in today’s ever-changing consumer landscape and as a result, will over or underestimate production and limit assortment.


A cultural shift is happening at many top grocers to combat this problem. Store associates are becoming inventory managers with the help of Invatron’s production planning software and are moving away from making high-cost decisions about production planning. As a result, grocers are seeing payback in months with higher sales, reduced shrink and fresher product.

production planning, case study #1

What is production planning software?

Our production planning software is part of a fresh item management system used in 7,500 stores across North America. It manages the transformation process from raw to sellable products, while incorporating your in-stock merchandising strategies. Our production planning tool generates accurate production recommendations on a daily, per item basis for fresh item retailers and is powered by a unique demand forecast engine. 


The demand forecast engine calculates these recommendations by evaluating:

  • - Cannibalization rules
  • - Daily and weekly sales patterns
  • - Events and seasonal influences
  • - Demand from all modes of distribution


That only tells you one half of the equation: how much you should expect shoppers to buy, but not how much to produce. To determine that, the workflow is simple.

production planning process

Knowing is half the battle, but there’s an algorithm for that now

Production planning optimizes your staff several ways: 


  • - By overproducing, you waste not only the product, but also the labor and packaging.

  • - For departments that use multi-cycle production plans like Bakery and Meat, our production planning tool can create a single daily plan that accommodates grouping of like products into production blocks and ensures that each batch is ready in time for the day’s highest demand period. Stores can now see the production requirements for the entire day and organize labor on their own terms, while still being compliant and offering the freshest product.

  • - By building repeatable, scheduled workflows you turn everyone into a high performer. New staff learn the speed and quality of production needed to become a star performer. It flattens the learning curve, speeding up training and gets more experience under their belts, faster.

  • - Store associates get a master pick list for every production cycle that limits the number of trips they need to make to the cooler and helpfully calculates total pick quantities. Instead of running to get strawberries three separate times for cut fruit, parfaits and mixed bowls, our production worksheet will tell store associates how many strawberries to prep in one go for everything. (Needless to say, time to shelf is a lot faster this way.)

Production Planning, case study #2

Summary

Without production planning, every time an experienced employee or department head says goodbye, you lose their production planning prowess. (And this happens far too frequently. The Food Marketing Institute found in a 2019 survey that turnover for all grocery employees was 45%, with part-time employee turnover even higher at 58%.) 


But now, thanks to Invatron’s production planning and forecasting tool, this brain drain is stopped. Financial losses are turned into gains, as our customers see an average increase of $80,000 to $100,000 in incremental growth margins, per store, per year. Production planning optimizes yield, labor availability and days on shelf. 


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