Ideas to Supercharge Your Retail Supply Chain
The global retail supply chain has struggled over the past decade. Even, the changes due to the pandemic have aggravated market volatility and increased the need to adopt agile and flexible approaches. On the flip side, poor supply chain practices have a detrimental effect on the environment. As a result, retail enterprises and stakeholders have become more focused on supply-chain resilience.
On a brighter note, Artificial Intelligence (AI) has greatly transformed the areas of the retail supply chain. There are a variety of use cases around faster product delivery, upgrading inventory control, and many more. Let’s read in detail about the innovations in supply chain management in retail.
Remodeling Supply Chain
AI has the ability to provide insights by analyzing huge volumes of data. It not only provides visibility into operations but also supports better decision-making. Even so, organizations have a long way to extract the full potential of AI. There are a total of five areas in supply chain management that are evolving with AI.
Executing full transparency through a virtual control tower. A supply chain control tower is a customized dashboard of data, which also consists of key business metrics and events across the supply chain. Moreover, it enables retail enterprises to understand in-depth, prioritize and resolve critical issues in real-time.
- Logistics and Distribution
In the language of logistics, dynamic route optimization creates routes from scratch using past data analysis. Moreover, it forecasts traffic or weather issues to ease product delivery. There is also a huge benefit in optimizing prices for product shipment in the tenure of a freight contract. In simple terms, a freight contract is a contract between a carrier of goods or passengers and the consignor, consignee, or passenger.
AI improves agile production planning and scheduling such as lower-value tasks like responding to queries, automating invoices, order management and tracking, GPS location, and similar administrative functionality. Additionally, it greatly enhances the forecasting and optimizing the accuracy of product stocks.
- Marketing and Sales
Retail supply chain management hugely benefits from demand forecasting. Some of the benefits are delivering the right product at the right time as well as satisfying customer demand.
Procurement is an area that generates a huge amount of data. AI helps in integrating the data acquired from buying decisions under conditions of scarcity with supply data and as per forecast prices, retailers optimize stock of raw material.
Last but not least, the successful implementation of AI in retail supply chain management has enabled early retail adopters to improve logistics costs by 15 percent, inventory levels by 35 percent, and service levels by 65 percent as compared to competitors’ costs.
Retail and electronic commerce is at the forefront of adopting AI. Some of the prediction models are being developed to better understand the causes and effects in supply chains. Moreover, selecting the right prediction model is critical. The retail supply chain is a complex field, new innovations are yet to be designed and adapted for specific business use cases.