2.3 Specifics of Grocery Retailing
2.3.1 Attributes of the Retail Grocery Supply Chain
The typology of Meyr and Stadtler (2008) is used to describe the grocery SC func- tional attributes (procurement type, production type, distribution type and sales type) as well as structural types (topography and integration and coordination). Since typologies can never be comprehensive, this focuses on planning relevant attributes. Grocery retailers buy and sell standardized fast-moving consumer goods as make-to-stock products. They source different products from many suppliers and have short and reliable replenishment cycles. Demand has to be estimated and may be unstable due to several reasons, e.g., seasonal influences or consumer preferences. Warehouse operations are the production areas where goods are picked for the deliveries to the stores. Distribution can occur in multiple ways from direct store deliveries to multiple distribution centers. Some of the products have dedicated distribution requirements, e.g., a continuous cooled transportation. The retail sales type can be differentiated into products from the permanent assortment and pro- motional products. Products from the permanent assortment have a stable life cycle compared to other industries and stable prices over a mid-term period. Promotional articles are only temporarily listed and have dynamically varying prices. Both non- seasonal and seasonal products are in retail assortments. With regard to relevant attributes for planning, products are heterogeneous and product sales are high. Major constraints are in capacity like shelf space, outlet backroom, transportation and picking. The SC is inter- and intra-organizational coordinated, as some suppliers maintain own shelf space in retail outlets. Inter-organizational coordination gained increasingly attention by concepts of ECR or Vendor Managed Inventories, partic- ularly these ones that are concerning consumer demand and improving information flows between the SC-members. Quante et al. (2009) classify grocery retail supply
chains as flexible, inventory-based chains with make-to-order products.