Supply chain disruption may have become a singularly hot topic in retail circles these past years, but a focus on improving supply chain planning and forecasting is far more than just a passing trend.
Emerging improvements in automated planning systems are now being used to address the inherent complexities and challenges in supply chain management, supporting retailers in previously unimaginable ways and profoundly mitigating ongoing supply chain risks. The use of AI and machine learning can now help retailers automate processes and drive better outcomes capable of improving overall industry health as well as experiences for end consumers.
According to Mikko Kärkkäinen, CEO of retail optimisation software provider Relex Solutions, “Automated technologies enable retailers and brands to realign and adapt to many pre-pandemic trends that were accelerated throughout the Covid-19 era. The systems are now being employed to manage volatility in demand and material shortages throughout the global supply chain.”
The resulting improvements to demand forecasting and other supply chain issues provide greater supply chain visibility, which leads to space optimisation and more accurate strategies for stock allocation, workforce deployment, and promotion and markdown management.
Retailers dealing with daily demand fluctuation often need to rely on manual data entry to roughly predict their stock supply requirements, a process that is not only time-consuming but virtually guarantees forecasts that are tainted by human error. Machine learning algorithms are capable of automatically recognising factors and patterns that influence demand without the need for human intervention, learning and improving without any additional programming necessary. These software solutions identify patterns in demand data from a variety of sources and use them to make accurate decisions at the store level.
As Kärkkäinen observes: “The unwieldy data sets that retailers and CPGs work with make it infeasible to manage supply chain complexities manually at scale. Automation allows planners to focus on innovation, competitive advantage, and other higher-value outcomes while delivering faster and more accurate calculations.”
This directly impacts the consumer experience with more localised assortments to meet trends in demand, shelves fully replenished based on calculable demand, better product availability, speedier fulfilment for digital sales, and balanced workloads for customer service employees who can refocus their attention on happy shoppers.
It’s now incumbent upon retailers to ensure their systems are not only capable of handling supply chain complexities, but also of simplifying them. Gone are the days when it was sufficient to focus on the links between supplier, distribution centre, and store – planners now need to deal with more delivery options, more demand points to predict, more shifts in inventory, and further disruptions to spending patterns that are likely on their way.
Instead of relying on manual supply chain management systems that are both outdated and ill-equipped to address current challenges in the industry, retailers should elect for automated, data-based solutions instead. Only these AI-powered adaptive systems can safeguard retail businesses against the frequent out-of-stocks that so heavily impacted business early in the pandemic, while at the same time protecting businesses from the guesswork and speculation over demand surges that never materialised and led to overstocks and spoilage. Automated systems can help retailers react promptly with optimal decisions when stock is waning or when the time comes to mark down leftover goods on shelves.
By investing in an automated supply chain solution, stock flow is improved, and consumers have timely access to purchases regardless of channel or delivery method. Smart tech updates – based on a thorough analysis of current business processes – can drive profitability now while gearing up for potential shifts in demand before they happen.
In response to the profound disruption of global supply chains and the media coverage it has received, Relex Solutions’ latest Apac on-demand webinar Supply Chain Disruption: How Asia Pacific Retailers Can Crack the Bullwhip addresses dysfunction in the global supply chain as it currently stands and covers best practices for approaching systemic challenges – cracking the bullwhip today to spur on preparation for the potential uncertainties to come.
The webinar explores how significant weaknesses that were recognised throughout the industry for decades but never properly addressed have been laid bare by the Covid-19 pandemic, which subsequently brought on the most significant drivers for the supply disruption we see today.
Retailers and supply chain professionals will not only learn how to alleviate supply risks by bolstering visibility throughout the supply chain via constructive collaborations between retailers and suppliers, but also how to build business durability through end-to-end supply chain transparency. Viewers will come away with an understanding of supply chain predictions and recommendations concerning strategies for retailers to be best prepared for instability in the months and years ahead.
For more information about the latest Relex Solutions on-demand webinar, click here.