Celonis & Peech launch app to cut perishable waste & losses

A new inventory management solution developed by Celonis and Peech has been launched to help retailers and consumer packaged goods companies reduce waste and revenue loss from perishable goods.

The product, called the Celonis Inventory Lifecycle Optimisation app, is designed to enhance how businesses manage perishable items, including fresh produce and baked goods, by improving the effectiveness of price markdowns before products reach the end of their shelf life.

Price adjustments for perishable goods are a key part of inventory management and have a direct impact on reducing unnecessary food waste. However, existing inventory management systems often lack mechanisms to track whether established markdown procedures are being correctly followed. This gap can lead to missed markdown opportunities, resulting in product disposal that diminishes stock and affects revenue.

Dean Tarpley, Industry Principal for Retail & CPG at Celonis, described the pressures retailers and consumer packaged goods firms face. "The Inventory Lifecycle Optimisation app enables organisations to identify process improvement opportunities, take action to increase markdown adherence, and monitor the effectiveness of those efforts."

The app leverages process intelligence capabilities to help retailers answer a fundamental business question, according to Anmol Gupta, Founder and CEO of Peech. Gupta stated, "By bringing Celonis Process Intelligence to the inventory lifecycle process, we were able to create a solution that lets retailers and CPG companies answer the question, 'Did we do everything possible to sell the inventory before it goes bad?' whether it's a loaf of bread on the grocery store shelf or cosmetics waiting for delivery in the warehouse."

One major global retailer, which records more than USD $200 billion in annual revenue, has incorporated the solution to address losses in perishable inventory, including products in bakery, meat, prepared foods, and other departments. The retailer reported a 2% improvement in sell-through rate, equating to a projected USD $35 million in recaptured revenue.

Through analysis, the retailer discovered gaps in adherence to established discounting processes which had led to missed sales, increased wastage, and compliance challenges. By implementing the app, regional managers have been able to more accurately identify where stores and departments are not meeting benchmarks for markdown process compliance.

Managers can now monitor performance at regional, market, store, department, and individual associate levels, gaining access to weekly insights that inform staff discussions and help to drive improvements in markdown adherence. The retailer is currently in the process of deploying the solution across 4,000 stores, expecting to see additional gains in compliance and reduced losses from perishable inventory.

The Inventory Lifecycle Optimisation app identifies and quantifies missed revenue opportunities by tracking observance of markdown procedures and pointing to areas requiring intervention. Among its primary functions, the app delivers an increased level of visibility for ongoing, data-driven improvements, allowing companies to monitor shrink prevention processes across the organisation.

The platform features a "Main View" for monitoring compliance and operational performance at multiple organisational levels, enabling focused process interventions where they are needed most. It also offers tools to track the long-term effectiveness of process adjustments. A "Monitoring View" is available so companies can follow the results of interventions over time, considering both compliance rates and revenue recapture.

Reporting capabilities are also designed to be adaptable, with the app providing user-specific notifications that help drive relevant process improvement discussions. Customers can configure regular updates to be sent through Celonis Action Flows, highlighting progress across stores, departments, and other relevant groupings to key managers and decision makers.

The Inventory Lifecycle Optimisation app has been added to the Celonis Platform Apps Program, which allows organisations to make use of solutions developed by ecosystem partners on the Celonis Process Intelligence Platform.