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The impact of technology in the supply chain

Technology has played a part in industry for many years – but how has technology affected the supply chain of retail brands?

Believed to promote efficiency, there are many things that have changed because of advances in this field. Here, we’ll explore how the relationship between retail and technology and how this will develop…

Demanding retail customers

How do you feel about demanding consumers as someone in retail? It’s an issue for some. Many consumers expect convenience from all angles now that they know it’s possible. 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.

Fast delivery and regular updates on an order’s progress is almost a given for many people buying online. 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.

Production and technology

The creation of the item being bought is the first part of the supply chain to go through a transformation. In the Digital Age, anything from blazers for men to ladies’ dresses can be tailored to suit a consumer’s affinity for personalised purchases. However, they still expect fast manufacturing and for their order to be delivered quickly. So, how has technology created more of an efficient supply chain?

First, the developments in cloud storage enable wireless data storage, which has almost eliminated crashes and lost information. Also, 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.

Robots are also pioneering the production line. When it comes to tailored products, this means that they can be created on demand, providing an efficient creation and delivery service.

AI: a help or a hindrance?

AI, or artificial intelligence, is really making waves in retail. 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 to make processes more efficient.

“Having a direct link between data being gathered and conveying that up the supply chain means that designers and developers can come back with the right products in shorter lead times,” says chief executive of Platform Thinking Labs, Sangeet Paul Choudary.

AI is also excellent at noticing consumer trends before humans do. 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.

As for stock, AI can help keep a better eye on levels and let us know when re-stocking is urgent. 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.

With an 180,000 square-foot distribution centre in Scotland that provides “a strong platform to support future growth”, QUIZ uses live data and insights on product performance to make vital decisions. 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.”

Technology and our job roles

Will technology make us redundant? It’s a fear for many in retail. Computers seem to have been given crucial roles that were formerly filled by humans in some retail companies. 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 can a warehouse function without human intervention? Maybe not: John Lewis, which opened two new distribution centres in Milton Keynes in 2016, actually created 500 new jobs despite the offering of technology.

Human emotions are sometimes vital in retail. To elaborate, computers can’t offer compassion or understand clients’ needs in the way that humans can, for example. Plus, people are still required for after-sales services.

Technology in retail years down the line

If you are in retail, you at least need to be aware of the changes going on in your industry. 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.

We don’t need to tell you how important efficient deliveries are to consumers. 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.

Take time today to see how technology can help you. Why not look to 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!

Sources

https://internetretailing.net/themes/themes/quiz-set-out-its-omnichannel-approach-ahead-of-stockmarket-flotation-15487

https://cdn.businessoffashion.com/reports/The_State_of_Fashion_2018_v2.pdf

http://fortune.com/2017/09/01/supply-chain-manufacturing-technology/

https://www.forbes.com/sites/shephyken/2016/11/12/todays-customers-demand-customer-service-on-their-terms/#77fe144fcaa2

https://www.mckinsey.com/~/media/McKinsey/Industries/Advanced%20Electronics/Our%20Insights/How%20artificial%20intelligence%20can%20deliver%20real%20value%20to%20companies/MGI-Artificial-Intelligence-Discussion-paper.ashx

https://www.arnoldmachine.com/6-exciting-advances-manufacturing-automation/

https://www.bloomberg.com/news/articles/2018-06-13/amazon-s-clever-machines-are-moving-from-the-warehouse-to-headquarters

 

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