The Impact of Automatic Store Replenishment Systems on Retail

European fast moving consumer goods retailers face a mature market with low margins and high competition. To improve their situation, retailers are looking for technologies and concepts to increase consumer satisfaction while at the same time reducing costs. One technology that promises to increase the availability of the products on the shelf while simultaneously reducing store handling costs is automatic store replenishment (ASR). At the heart of ASR systems lies software that automatically places an order to replenish stocks of a certain product. A majority of European grocery retailers have implemented such decision support systems. Yet research in this area is practically non-existent. Therefore, this thesis aims to investigate the impact of this technology on retail, taking into account financial, organizational and personnel aspects. To answer this main research question, a quantitative and a qualitative methodology was chosen. First of all, based on theoretical sources and more than 50 interviews, a descriptive model and an ASR classification system is developed. Next, an explanatory model is developed with a view to enabling identification of the characteristics of products, stores and replenishment systems that influence the replenishment performance of retail stores. To be able to test the hypothesis derived from this explanatory model, exhaustive data from a grocery retailer is examined. The quantitative analysis clearly shows that even simple automatic replenishment systems are able to dramatically reduce the average shelf out-of-stock rate and at the same time lower inventory level. In addition, a major advantage of automatic systems over manual ones is that they show constant results, independently of product characteristics. Yet the analysis also shows that badly-parameterised automatic systems will fail to deliver the desired results. In order to better understand how ASR systems are best implemented in practice, four major grocery retailers are analysed in detail. These case studies illustrate the necessary technological and organizational changes and highlight the influence of ASR systems on the working behaviour of employees. Overall, this thesis makes contributions to both practice and theory. On the one hand, the results presented are a first stepping stone towards the creation of a basic theory of ASR systems. A descriptive model enables further researchers to make differentiated statements on the impact of ASR based on the classification developed. Another contribution is the explanatory model which tests existing and demonstrates new relationships hypothesised in inventory and operations management research. On the other hand, practitioners receive an overview of the