Since the digital revolution in 1947, technology has never been more important for almost every sector — but especially for retail businesses. Many people believe that this has 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.
With the world of online shopping becoming more prominent, customers have become more demanding of both their online and offline shopping experiences.
As customers gain more knowledge into the capabilities retail business have, they expect greater things. 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.
If your customer is ordering a product, they expect next-day delivery and an option to track the whereabouts of their parcel. 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 beginning stages
However, before anything goes out to be delivered — it must be created. 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?
To start off with, data can now be stored wirelessly meaning machines can be updated with the correct information instantly. This prevents delays involving computer crashes and data loss.
3D printing is on the rise too. 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 is able to create products with time and material efficiency.
The development of robots and machinery that can run 24 hours per day means that the manufacturing process is also quicker. When it comes to tailored products, this means that they can be created on demand, providing an efficient creation and delivery service.
Does artificial intelligence play a role?
More retail businesses have begun applying artificial intelligence to their operations to help develop their own supply chain and continue to offer great services to customers.
The big role artificial intelligence is playing is undeniable. In fact, according to 2017 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 is able to 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” was one comment by Sangeet Paul Choudary, founder and chief executive of C-level advisory firm Platform Thinking Labs.
As well as this, AI can predict popular products and use customer insights to make more informed decisions. 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.
You are probably already aware that human error can cause mistakes in the supply chain. 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.
Dresses retailer, QUIZ, which has recently branched out with its QUIZMAN brand to sell popular pieces such as men’s blazers, has invested heavily in its supply chain and seen results. 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.”
The impact on staff members
With advancements in technology continuing to take over, many people believe that this can have a negative impact on their jobs.
The creation of software and algorithms have placed the need of humans in some industries. 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.
Businesses should be looking at other options too. 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.
A look towards the future
If retail businesses want to keep up with customers, they must take a look at their current supply chain. When it comes to AI, any platform that has access to customer insights and data has the ability to connect directly to manufacturers to integrate and better inform the process.
As well as this, retail businesses must begin to invest more in storage space. 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.