Coles to transform fresh produce replenishment with cloud, AI system

Coles Group is set to transform the way it replenishes stocks of fresh produce across its more than 850 supermarkets nationally with the help of a new cloud-based platform.

Fresh produce at Coles (Credit: Coles/Relex Solutions)

The retailer said today it had struck a deal with Relex Solutions for the platform, which uses artificial intelligence algorithms to forecast demand based on a number of variables and to reduce waste, and automation to reduce manual effort.

The Relex platform will be used across all supermarkets and the retailer’s seven fresh produce distribution centres.

“Fresh produce presents many unique challenges compared to other parts of the grocery business: shorter shelf life, seasonality, price elasticity, along with the diverse and complex growing seasons and regions we are challenged with in Australia,” Coles executive general manager for central operations and transformation Kevin Gunn said in a statement.

“Using the Relex solution to centralise the control of the replenishment model allows Coles to provide increased efficiency in one of our most complex supply chains and improve the customer experience through more targeted ranges, improved availability, fresher products, and simpler processes for our team members and our suppliers.

“The centralised ordering of fresh produce will also help to reduce waste on our existing range and minimise waste on new ranges.”

The same Relex platform is also used by grocery chains in the United States and Europe.

Coles chief information officer Roger Sniezek said the deployment “forms part of Coles’ easy ordering program, which is a critical project in delivering on our smarter selling strategy.”

The smart selling transformation was announced in mid-2019 and aims to reduce the retailer’s costs by $1 billion over four years.

Data and analytics initiatives deployed to date enabled Coles to achieve its first $250 million in savings.

Sniezek said that “the new replenishment platform will integrate with Coles’ existing in-house advanced analytics smarter forecasting solution, which has already been rolled out to other non-fresh categories.”

“This will enable an improved customer offer by not only taking into account past purchases, but also factoring weather and local community events into the forecasting algorithms,” he said.