ALBANY, Calif. -- Andronico's Markets here is preparing to install a production-planning system that the retailer expects will reduce shrink, cut costs and increase production efficiency in its home-meal replacement and deli departments.
Andronico's, a member of Certified Grocers of California, Los Angeles, expects to pilot the new software in one store this month. A full implementation of the system in all Andronico's stores will take place within the next three months, according to an Andronico's official.
"While we do not have a final payback analysis in hand, we are confident that the projected savings are significant enough to warrant the project," said Bill Andronico, president of the eight-store retailer.
A source familiar with the situation told SN the retailer hopes to see between a 2% and 6% payback in production and inventory cost savings in its home-meal replacement program once the system is fully deployed.
By automating its production planning, Andronico's hopes to significantly reduce the risk of human error in calculating inventory. The system can also react to changing market conditions and ingredient costs, thereby reflecting the actual cost of meal items.
"You have either too much product or too little product," said Mike Miller, director of information systems at Andronico's. "Using a person to calculate the production of fresh product is extremely costly because of the time it takes, the potential for error, and the sheer quantity of items they would have to calculate.
"This [application] will ensure we will not lose sales because an ingredient is out of stock," he added. "The workers can input a recipe, and the entire production -- both the quantity of the ingredients to order, and instructions on how to properly cook and store the meals -- is automated."