The world has become notoriously digital and businesses are willing to make the technological changes that could potentially enhance their operations. Many people believe that this has 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 customers want
Customers have greater expectations of brands too, which many are failing to deliver on — such as next day delivery and parcel tracking options — meaning that men’s shirts you order will never get lost. As customers gain more knowledge into the capabilities retail business have, they expect greater things. 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.
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.
Before you order those going out dresses for example, they 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?
Data can be stored automatically and backed up. This prevents delays involving computer crashes and data loss.
Believe it or not, 3D printing is the next big thing. 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.
Because of these developments, machinery can now run all hours of the day and improve the production line for many businesses. When it comes to tailored products, this means that they can be created on demand, providing an efficient creation and delivery service.
The introduction of artificial intelligence
Today, we’re seeing more retail businesses introduce artificial intelligence to their operations — and those that haven’t are looking to invest in the future.
For those businesses that have adopted its use, it played a big role in their operations. 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.
“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” was one comment by Sangeet Paul Choudary, founder and chief executive of C-level advisory firm Platform Thinking Labs.
Another benefit to AI is that is can extract data from customers and determine popular products. 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.
This was introduced to the retail sector because human error was occurring too often. 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.
One brand that has made improvements around its supply chain 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.”
How do employees feel?
Across a lot of different sectors, many workers believe that their jobs are at risk as a result of new technology. The creation of software and algorithms have placed the need of humans in some industries. 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.
But, what are the other options? 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.
What can we expect in the next few years?
If retail businesses want to keep up with customers, they must take a look at their current supply chain. Customer demand is growing, and retail businesses can only keep up with 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.
Have you looked at your current warehouse space? 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.