Plan for Short Life Products

Planning for a short shelf-life or perishable supply chain can be challenging. A large part of the cost here is obsolescence - stuff that you throw away at the end of its short life.

In my neighborhood store, the vegetables always look fresh and appealing - ready for a sumptuous meal. I never pause for a moment wondering how much of it is thrown away and what they do with what is leftover!!

Should you plan in such cases a replenishment that is deliberately below the average expected demand? So essentially you are planning to stock out the customer at the end of the day or that particular cycle. Again, negative safety stock!!

Does it make good business sense to plan this way?

The founder of ID Fresh in a recent speech claims that deliberate short supply has its benefits - it makes the product valuable and makes the customers queue up the following day.

Supply creating new and additional demand........

Perhaps for a unique and differentiated product, this may be true. But for a commodity product with fewer barriers to entry, could this be problematic?

Think Nintendo Wii - the product that was perennially in short supply for a few years!

Contact us to learn more details on how to plan for such short life products...