The world of retail appears to be more reliant on technology to survive. 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.
Apparently, consumers are getting more demanding, which has caused companies to react if they want to retain and attract customers. 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.
Tracking a package throughout its entire journey and getting the item you purchased last night the next day is no longer a luxury in retail for many customers. 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 of the supply chain
Even producing an item has changed. 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?
First, the developments in cloud storage allow data to be stored wirelessly, so that machines can be automatically uploaded and information backed up. Consequently, there are fewer delays and setbacks because of crashes and losing data.
The supply chain today would also look very different without 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 can create products with time and material efficiency.
Androids are another technical revolution that has accelerated the supply process. When it comes to tailored products, robots allow companies to create products on demand, providing an efficient delivery service.
Artificial Intelligence (AI) and enhancing the supply chain
AI technology is critical to supplying customers with goods in 2018. 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.
Collecting customer insights and predicting data is another attribute of AI. 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.
With technology, we can help to lower the opportunities for human error. 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.
QUIZ Clothing & QuizMan, UK clothing retailers, has evaluated and enhanced its supply chain. 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.
What about employees of these retail brands?
Do advances in tech mean people’s jobs are likely to be cut. 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.
Of course, there are two sides to every tale. 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.
Industry and job role, of course, play a large part in job safety when it comes to technology. 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’s in store for retail in the UK?
Re-assessing current supply chains should be a priority for all retail companies. 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.
Putting more money into efficient warehouses and delivery services will be key. 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.
Tech-enhanced infrastructure is another aspect that we may see more of in retail over the next few years. This could be via autonomous electric vehicles that operate through the night and intelligent algorithms that predict the most efficient routes for delivery.