If the retail industry wants to survive much longer, it must shift it’s focus on technology. But how has it affected the supply chain specifically? Read on as we explore how technology has transformed and helped businesses maximise their supply chain efficiency, including making deliveries speedier and keeping up with fluctuating consumer demands.
The demand from consumers
With customers becoming more demanding, retail businesses must change their ways to ensure they retain their customer. Many consumers expect convenience now that they know it’s possible. When they’ve received one service from a business, the bar is raised, and they expect that all their other favourite brands will do the same.
Today, more customers expect the ability to track their orders once they have been dispatched. For businesses, this means that an efficient supply chain with a well-managed inventory tracking system is essential. And, when it comes to getting in touch with the business, customers expect instant contact through the channels that they’re most used to — Twitter, Facebook and instant messaging platforms.
The starting stages
All products must be created before they go up for sale. In the Digital Age, more products are being tailored to the buyer due to their love for personalised purchases. But, as they still expect a speedy delivery, manufacturing and delivery must be efficient. How has technology created more of an efficient supply chain?
As data has become so import, cloud storage is a new area of investment for businesses — and machines can be automatically backed up. Consequently, there are fewer delays and setbacks because of crashes and losing data.
With 3D printing at the ready, the way the supply chain operates could be entirely different. The process of 3D printing is what people are referring to as a form of ‘additive manufacturing’. This is where there are no wasted raw materials. Through this technique, this type of printing can create products with time and material efficiency.
When it comes to tailored products, robots allow companies to create products on demand, providing an efficient delivery service.
Does AI go hand-in-hand with the supply chain?
If businesses want to move ahead of their competitors, artificial intelligence (AI) is a good shout. In fact, according to findings by McKinsey & Company, taking an AI approach to the supply chain could reduce forecasting errors by up to 50% and overall inventory reductions of between 20% and 50%. This sort of technology can think and learn like humans, reacting to stimuli often without human input, too. In the supply chain, AI can assist with packaging, research and development, and inventory management which can help make the process more efficient.
“This is especially important in the case of industries like fast fashion, where user tastes change very quickly, and supply chains are usually slower to react. In such scenarios, having a direct link between the actual data being gathered from users about their tastes and what they’re interested in — and conveying that back up the supply chain — means that designers and developers in the business can come back with the right products, in much shorter lead times,” claims Sangeet Paul Choudary, founder and chief executive of C-level advisory firm Platform Thinking Labs.
It’s essential for businesses to begin collecting data and insights, as this can help with future decision making. Machines with AI abilities can also gather information on location so that warehouses in certain areas can stock more of a product that’s popular in the area. This goes on to improve delivery times and customer satisfaction.
A lot of retail businesses will have aims to reduce human error, and this is something that can be achieved through AI. AI can eliminate this by keeping track of stock digitally and reporting back to a data handler. This process removes the potential error of miscounting inventory or recording inaccurate information, which could then go onto lead to the wrong amount of stock being replenished.
Going out tops supplier, QUIZ have already reviewed their supply chain — which has allowed them to open QUIZMAN, where they are known to be men’s blazer specialists. The brand says that its 180,000 sq. ft distribution centre in Glasgow provides “a strong platform to support future growth”. The company also uses insights and live data on product performance to allow “informed key buying decisions to be made quickly”. QUIZ also implements a test and repeat approach to its supply chain so that it can “introduce new products to stores and websites within weeks of identifying trends and reorder successful products quickly.” This could include anything from when to start selling Christmas party dresses to which new clothing trend from the latest fashion show has proven the most popular with consumers.
The position of employees
Many believe assume that as technology evolves, jobs become at risk. In some cases, the use of algorithms and software has replaced the need for human employees. At Amazon, for example, employees who were once in charge of securing multimillion-dollar deals with brands have been replaced with software that can predict exactly what shoppers want and how much should be charged.
But, there’s a lot more to look at. The huge warehouses that store products require people to manage them. For example, when John Lewis opened two new distribution centres in Milton Keynes in 2016, 500 new jobs were created as a result.
However, a lot of this comes down to the sector that you operate in. Computers can’t offer compassion or understand clients’ needs in the way that humans can, for example. And people are still required for product delivery, as well as for offering after-sales services.
What does the future hold?
When it comes to AI, any platform that has access to customer insights and data can connect directly to manufacturers to integrate and better inform the process.
If you want to develop your delivery strategy, investing in additional warehouse space could be one solution. As more people want the same amount of choice at a higher speed, this means that warehouses must stock a wide range of sizes, colours and styles at each of their locations — in close enough proximity to anyone who orders. In fact, there are already massive distribution centres, equal to the size of a town, which logistical networks that pick products from the shelves and send them on their way to customers.