Space Management: A Strategic Advantage in the On-Demand Grocery & C-Store Sectors

Introduction

As competition intensifies in the on-demand grocery and convenience store sectors, mastering space management has emerged as a critical strategic asset. Efficient space utilization not only enhances operational efficiency but also significantly impacts customer satisfaction and profitability. In this blog we will explore the importance of space management, exploring key concepts such as planogramming, warehouse balancing, and fridge replenishment, while highlighting how the OrderGrid Space Management platform can enhance your business operations.

‍

The Importance of Effective Space Management

Effective space management in the on-demand grocery and convenience store sectors is about more than organization; it involves the strategic planning and utilization of physical space to optimize inventory storage, picking efficiency, and overall workflow. As highlighted by McKinsey, managing space efficiently is crucial due to the complexity introduced by a large number of SKUs and categories. 

“A broader assortment includes trade-offs on available space to store a longer tail, the accuracy of inventory (and subsequent impact on picking efficiency), and the productivity of operations when fulfilling large, complex orders.”

Effective space management leads to:

1. Increased SKU Range: By efficiently utilizing space, retailers can accommodate a broader range of products, catering to diverse customer preferences and increasing sales opportunities.
2. Reduced Operating Costs: Optimized space planning reduces the time and effort required for picking and receiving products, leading to lower labor costs and faster order fulfillment.
3. Enhanced Customer Satisfaction: Efficient space management ensures that products are stored in optimal conditions and are readily available for quick picking, leading to timely deliveries and satisfied customers.

‍

3 Key Benefits of Space Management

1. Optimal Space Utilization

Effective space management ensures that every inch of the store or warehouse is used efficiently, employing techniques like planogramming and space planning to maximize the number of SKUs and reduce operating costs. This efficient use of space allows for a wider product range, catering to diverse customer needs and preferences. As a result, customers find the products they want more readily, enhancing their shopping experience and satisfaction.

2. Warehouse Balancing

Managing products across multiple locations, including hard-to-access storage areas, ensures balanced inventory levels and streamlined operations. This leads to faster stocking and picking processes, significantly contributing to operational efficiency. Coupled with AI technologies like those offered at OrderGrid, businesses can achieve precise product placement, reducing put-away times and speeding up stocking processes. AI algorithms can also be used to predict when to refill primary bin locations, ensuring efficient restocking and maintenance of chilled product supplies. These advancements minimize delays and reduce labor costs, enabling retailers to handle a larger volume of orders more effectively. 

3. Fridge Balancing

Ensuring that chilled products remain at the right temperature throughout the picking and delivery process is crucial for maintaining product quality. This aspect of space management is vital for customer satisfaction, as it guarantees that chill-preferred and perishable items are delivered in optimal condition. Strategic item placement leads to faster picking times, ensuring that chill-preferred products are efficiently managed. Furthermore, efficient space management in refrigerated areas aligns with environmental sustainability goals by reducing waste and energy consumption, thereby lowering the carbon footprint.

‍

Introducing Space Management by OrderGrid

OrderGrid excels in space management, providing a comprehensive suite of features tailored to maximize space utilization, streamline operations, and boost overall efficiency. Let’s explore how each of these powerful tools can significantly benefit your business:

Experience Seamless Warehouse & Store Navigation with Live Store Layout

With Live Store Layout, you can virtually navigate your store, viewing products by their physical location in the warehouse and at the shelf level. This feature not only simulates a virtual walk-around but also helps monitor planogram compliance and identify opportunities for relocating high-velocity items to more accessible locations for enhanced efficiency. Future updates will include product pick and space utilization heatmaps, enabling you to fill empty spaces effectively to ensure optimal use of available space. 

Maximize Space and Accuracy with Bin Slotting

Bin Slotting is a powerful feature that simplifies space allocation by maintaining an accurate planogram indicating the number of units per product for each bin. By uploading a CSV or creating a planogram entry, you can ensure precise space usage and streamline warehouse operations by enabling workers to follow the planogram accurately, reducing errors and boosting productivity.

Maintain Freshness and Quality of Chill-Preferred and Perishable Goods with Fridge Replenishment

Ensuring that both chill-preferred items and perishable goods are stored correctly is critical to achieving customer satisfaction and retention. The Fridge Replenishment feature helps maintain optimal storage conditions by monitoring expected sales and inventory counts by temperature type. By uploading details of chill-preferred items, you can ensure their quality is preserved. This proactive inventory management feature allows you to identify items with higher demand than the current chilled inventory, enabling you to move them accordingly to meet customer needs and enhance overall satisfaction.

Optimize Inventory Flow with Storage Balancing

Storage Balancing provides clear visibility of items across both storage and non-storage bins in various store and warehouse locations, helping you manage inventory more effectively. By configuring bins properly, you can ensure efficient space use and dynamically manage inventory based on current demand. This proactive approach prevents stockouts and overstocking by ensuring items are moved from storage to non-storage bins as needed, maintaining a balanced inventory flow and optimizing space utilization.

Enhance Efficiency with Guided Move Orders

Move Orders streamline the process of relocating items within the warehouse or store by providing a guided workflow for employees. Automatically generated move orders direct employees to pick and drop items in optimal locations, ensuring efficient movement of goods. This feature not only maintains balanced storage but also ensures that fridge fills are managed correctly, enhancing overall storage management and operational efficiency.

Maintain Inventory Accuracy with Expiry Management 

Managing expired items is essential for maintaining inventory accuracy. The Expiry Management - Move Orders feature guides users to remove expired items from shelves and place them in a designated consumption bin. By regularly removing expired items, you can maintain accurate inventory levels and streamline the disposal process, reducing waste and improving overall stock management. This efficient handling of expired products ensures better inventory control and minimizes losses.

Improve Product Placement with Intelligent Receiving Prompts

Receiving Destination Prompts recommend planogrammed locations for product drop-off at the time of receiving, ensuring items are placed correctly from the start. This feature enhances planogram compliance by nudging receivers to place items in designated locations, while still allowing some flexibility for workers. By guiding correct placement from the outset, it maintains overall planogram structure and improves the efficiency and accuracy of product placement.

Maximize Space with AI-Driven Optimization

AI Space Optimization uses advanced algorithms to analyze product dimensions, bin coordinates, bin dimensions, and sales velocity, generating a planogram and making product placement recommendations. This automated optimization ensures that you receive a ready-to-use planogram that efficiently utilizes space based on various factors. Additionally, it improves compliance by automatically generating product move recommendations, ensuring adherence to the planogram and optimizing overall space management.

Tailor Storage with Customizable Bin Flagging

Bin Flagging allows detailed configuration of product dimensions, temperature type, and storage flags for each bin, enhancing the accuracy of space management. By providing specific parameters during bin creation, you can ensure each bin is used optimally. This customized configuration maintains clear and organized bin setups, significantly improving overall space management and organization.

‍

Integrating Space Management into Your Operations

Integrating space management into your on-demand grocery and convenience store operations requires a strategic approach. Here are some helpful steps to get you started:

1. Assess Your Current Space Utilization: Conduct a thorough analysis of your current warehouse and store layout and identify areas for improvement.
2. Implement Planogramming: Create detailed planograms for each section of your warehouse and store, ensuring that high-velocity items are easily accessible.
3. Utilize Technology: Leverage advanced space management features like those provided by OrderGrid to automate and optimize space management processes, from live store layouts to AI space optimization.
4. Train Your Team: Ensure that your warehouse and store staff are trained to use the new systems and understand the importance of following planograms and move orders.
5. Monitor and Adjust: Continuously monitor your space utilization and make adjustments as needed to maintain optimal efficiency.

‍

Conclusion

Effective space management in the on-demand grocery and convenience store sectors, especially, is not just a logistical necessity; it's a strategic differentiator offering significant benefits in terms of operational efficiency, cost reduction, and customer satisfaction. Technologies like OrderGrid's Space Management module are at the forefront of this transformation, promising a more efficient, customer-oriented, and sustainable future for food retailers.

Looking to upgrade your approach to space management? Book a demo with OrderGrid today and discover the tools and insights needed to turn space management into a competitive edge, driving growth and success in your operations.