If retail businesses want to remain ahead of the game, they must acknowledge the technological advancements around them. 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.
What your customers want
Consumers now have higher expectations and want retail businesses to offer the level of service they deserve — but many brands don’t know how to react and see this as a challenge.
You must consider what is most convenient for your customer. 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 you want to stay on top of your game, you must offer a next-day delivery service as well as product tracking. This is what your customers want. To achieve this as a business, 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 first steps
Before anything else, the product 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?
Cloud storage continues to develop, and this has allowed data to be stored automatically. This prevents delays involving computer crashes and data loss.
Has your business considered the use of 3D printing? 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.
Technology has the ability to run 24/7, which can speed up manufacturing processes. When it comes to tailored products, this means that they can be created on demand, providing an efficient creation and delivery service.
Artificial intelligence (AI)
To begin making any changes across a retail business, brands must consider looking over their current supply chain and come up with a strategy to cater to the demand of customers.
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” commented Sangeet Paul Choudary, founder of Platform Thinking Labs.
Now, customers can determine what products are most popular with customers. 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.
Human error has become more common too, but AI can remove this worry that many brands have. 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.
One brand that has looked at is supply chain recently is QUIZ. 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.”
An employee’s point of view
We can’t ignore that technology is being heavily invested in across all sectors and many employees are worried about their careers.
However, it’s important to acknowledge that in some instances, jobs have been lost as a result of new technology. 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.
You must look at the full picture, though. 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.
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?
It’s time to review your 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.
To keep up with consumer demand, it’s likely that brands will invest further in warehouses to store inventory. Last minute order? You could potentially have a men’s blazer for yourself or daughter’s prom dress delivered straight away. or 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.