Technology has never been more important for businesses — as they must begin to acknowledge both online and offline competition. 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 customer demand
As customers begin to have higher expectations, businesses around the world are facing greater challenges that they don’t know how to tackle.
For a customer, it’s all about convenience. 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.
Does your business offer next-day delivery with tracking options? 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.
At the start of the supply chain
The beginning stage must include the creation of the actual product. 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 cloud storage technology continues to adapt, data can now be stored automatically and will be backed up. This prevents delays involving computer crashes and data loss.
3D printing is also another area that is on the rise and should be acknowledged. 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.
With more advanced machinery, equipment can run all day every day allowing the manufacturing aspect to become more efficient. When it comes to tailored products, this means that they can be created on demand, providing an efficient creation and delivery service.
The role of AI
Believe it or not, retail organisations are beginning to revaluate their own supply chain to ensure that it can keep up with the demands driven from consumers.
Artificial intelligence, often referred to as AI has become an integral part of the supply chain for many retail businesses. 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.
Industry expert, Sangeet Paul Choudary, who is the founder of Platform Thinking Labs, commented: “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.”
By collecting customer insights and data, AI can determine what products will be the most popular. 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.
AI could potentially eliminate human error 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.
Leading fashion brand QUIZ has already reviewed 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.”
The employee perspective
With technology constantly advancing, job loss is something that is on everyone’s mind.
We can’t deny that in some workplaces, humans have been replaced. 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.
However, we must look at all areas. 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.
But this could depend on the sector. 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.
The future of retail’s supply chain
If retail businesses aren’t doing so already, they’ll be looking over 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.
It’s thought that further warehouse investments will be made to keep up with delivery rates, this will be particularly good for fashion brands. 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.