3 Ways to Improve your Retail Supply Chain Management
The retail industry has faced a number of challenges throughout the years. But for successful businesses with outstanding sales, the real challenge, aside from maintaining customer loyalty and keeping the cash flow strong, is supply chain management. Being able to keep up with customers’ demand is what we need to be focusing on. Results from Zebra’s 2017 Global Retail Vision Study have shown that out-of-stock inventory is one of the main factors that will make customers dismiss a brand. That is why 72% of retailers plan to reinvent their supply chain using automation, sensors and analytics by 2021.
The Tech-Enabled Supply Chain Makeover
The supply chain is composed of four main stages — design, manufacturing, distribution and sales. All of theses stages can be improved by digital technology. Here are three ways that this can be made possible.
1. The Internet of Things (IoT)
Retailers can use the real time data obtained from IoT to help identify problems in the supply chain, provide localization and send notifications when shipment delays occur. These will help reduce costs, and improve labor productivity, efficiency and accuracy of the supply chain. For example, using the localization of an item will help reduce the times it takes to search for inventory, resulting in lowered costs and enhanced productivity. Also, in the food and drink industry, companies such as Zest Labs rely on the use of IoT devices to monitor days to expiration of goods, which is crucial to prevent waste, hence, resulting in less losses for the business.
Earlier, we talked about customers letting go of certain brands because of out-of-stock items. Well, the solution to this problem might be found in Radio Frequency Identification (RFID). More and more retailers will be using RFID to pinpoint their inventory in real time. Melanie Nuce, Vice President of GS1 US, explains that retailers tag all store items with RFID tags, which reduces out-of-stock items by 60% to 80%.
2. Machine Learning
Machine Learning is known as a branch of the much broader Artificial Intelligence spectrum. The technology behind Machine Learning uses algorithms to help turn data into useful information for businesses. These algorithms will not only let businesses know their customers’ shopping habits and preferences, but will also help create a more efficient process and reduce operation costs.
More and more companies use this technology to help forecasting problems that could occur in the supply chain planning process. For instance, supply chain software company Arkieva helps its clients obtain a better production flow by being able to forecast wear and tear on equipment. As a result, the company avoids major setbacks on production planning.
3. Automation
With new technologies constantly being developed, supply chains are becoming more and more effective. However, it is not immune to human error, due to the fact that multiple tasks are still being performed by hired staff. Automating systems is important to provide accurate information on a real-time basis. Automated handling is achieved by teaching software robots tasks that would normally be performed by employees, who might take much more time and lead to more errors in the supply chain.
Automation is not limited to reducing the production errors risk. Robotizing the supply chain also means centralizing all steps of the process, such as storage, shipping and inventory. All of which will help improve inventory management, shipping delays and increase sales at the same time. Contrary to popular belief, the goal of digitizing the supply chain management is not to completely erase the human role in the marketplace. However, by doing so, managers are able to work with more efficient tools, thus obtaining better results. For example, managers using a centralized dashboard will be notified instantly of any problem in real time, and will be able to pinpoint and address the situation in a timely manner.
Now that the ways to improve your supply chain management are no longer a secret, it’s time to turn theory into practice.
