The introduction of new technology has shifted the way different industries operate. But how has technology affected the supply chain of retail brands?
What do customers expect?
With customers being to shop almost anywhere, demand around their experience has increased. 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.
When it comes to product delivery, customers now expect a next-day service with the ability to track the movement of their parcels — this allows them to gain a full overview. 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.
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The beginning stages of the supply chain in retail
How products are manufactured has also changed as a result of technological advancements. In the Digital Age, more products are being tailored to the buyer due to their love for personalised purchases. However, customers still expect fast manufacturing and for their order to be delivered quickly. So, how has technology created more of an efficient supply chain?
Did you know that data can now be stored wirelessly? This is thanks to the cloud. Since automatic backups and uploads can now take place, there are fewer crashes and lost data occurrences, which is great news for retail companies.
A new process for manufacturing is 3D printing. This is where there are no wasted raw materials, and via this technique, this type of printing creates products with time and material efficiency.
As well as 3D printing, robotics is an area of focus for businesses. When it comes to customised products, using robots means that they can be created on demand, providing an efficient creation and delivery service.
The position of artificial intelligence (AI)
More companies are beginning to invest in AI. 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%. Chief executive of Platform Thinking Labs, Sangeet Paul Choudary, claims: “Having a direct link between the actual data being gathered 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.”
One of the many benefits of AI is that it can act as a human would and offer the same expertise. In the supply chain, AI can assist with packaging, research and development, and inventory management to make processes more efficient.
As well as this, it can extract data and insights which can predict new trends in consumer activity. 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.
Because more people are ordering products online and offline, this can track stock levels. 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 for example, who has an 180,000 square-foot distribution complex in Scotland has already started adjusting their supply chain. The brand 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 jobs
Are jobs at risk? Computers seem to have been given crucial roles that were formerly filled by humans in some retail companies. At Amazon, employees who were once in charge of securing major deals have been replaced with software that can predict what shoppers want and how to set prices.
However, machines won’t always be ahead of humans in the job game. One example of this is John Lewis, which opened two new distribution centres in Milton Keynes in 2016 that created 500 new jobs.
Machines do not have human emotions, so can’t offer a personal and tailored service to customers. So, does this mean some jobs are safer than others?
The future of retail
If retail businesses want to continue with swift operations, they must keep engaged with new technology around their sector. 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.
It’s essential for quick deliveries too. 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.
If you take anything from this article, make sure to review your current supply chain. Why not implement autonomous electric vehicles that operate through the night or intelligent algorithms that can predict the most efficient routes for customer delivery? Both will make your supply chain much more efficient and consumer-friendly!