The retail industry has become accustomed to dealing with disruption over the past few years. COVID-19 lockdowns brought about unpredictable challenges, such as overstocked warehouses, port issues and order cancellation due to suppliers shutting down. This has continued into 2022. Retailers were braced for the fresh challenge of updating their business models to keep up with increasingly complex supply chain issues.
The current inflation crisis is driving supply costs up while simultaneously forcing shoppers to tighten their purse strings. Customer shopping habits and priorities are also changing. Technology is feeding greater demand for convenience through digitalised services and shopping experiences. The appetite for greater speed and efficiency in service, delivery and performance is growing. So businesses are looking towards supply chain 4.0 as the answer to accommodating these changing customer needs.
This next generation of supply chain operations uses industry 4.0 technologies like artificial intelligence and internet of things (IoT). It will transform supply chain management from the traditional linear model (instructions flowing from supplier to producer to distributor to consumer and back) to a more integrated model that allows information to flow in multiple directions.
These technologies are transforming the modern-day supply chain process. They are ensuring continuity of production and improvements in operational efficiency, despite current supply chain issues.
Evolving through automation
The retail industry is yet to take full advantage of the digital transformations that other sectors have been leading on. Namely, financial service organisations recognised how embracing technology-led transformation can drive changes to customer experience, aiding retention and growth of its customer base. This is while building brand reputation to gain competitive advantage. By automating manual processes, banks have adopted a more agile approach to resource management, freeing up time to focus on innovation while, cutting costs and reducing time to market.
Evolving consumer expectations are driving the retail industry’s need to adopt efficient automation solutions. It will enable it to effectively navigate emerging market trends and innovations. Events of the last few years have motivated supply chains to rapidly adopt technology in order to survive. To compete effectively, organisations are now taking the first step to embrace digital change and evolve through automation.
Supply chain 4.0 uses technology such as artificial intelligence models and robotic process automation (RPA) to automate workflows and optimise actions across multiple departments. When adopted at the very start of the design process, automation can help retail organisations to rethink and adapt production to meet both current and future requirements. This is while increasing efficiency and customer insights through smart connectivity and real-time data capture.
A key element of supply chain 4.0 is the use of real-time information that flows across all parts of the chain. Supply chain managers can access data and analytics via a centralised platform across all departments and ensure end-to-end transparency across teams. All parties, from suppliers to warehouses to vendors, can benefit from the agility and flexibility that a streamlined operations process provides. This is enabling collaborative solutions, forecasting capabilities, and driving productivity – which ultimately results in an enhanced customer experience.
The importance of data
Statistical insight is also critical for the supply chain to understand sales forecasts and uncover upcoming market trends. When fed with good quality data over time, predictive analytics can enable managers to identify patterns and plan for supply and demand accordingly.
Leveraging data collected from connected devices and machine learning algorithms into one centralised platform. This will enable stakeholders to make well informed decisions around risk management, product design and marketing.
A key challenge for the supply chain is a lack of clear strategy and processes used to collect, analyse and use data. Organisations with siloed data capture applications in merchandising, warehouse management and sales will experience greater inefficiencies. They will ultimately lose out on opportunities to draw valuable insights.
Supply chain managers and merchandisers therefore need to collaborate on a single ecosystem. Then, they can understand challenges of meeting customer demand, pre-empt them and ensure warehouses are not overstocked.
When data is properly managed and understood, managers can predict risks and potential hazards that could impact the supply chain. Then they can devise solutions before a problem occurs. This drives continuity in the production process, resulting in significant cost savings and creating an advantage over competitors.
It’s not just the production process that benefits from end-to-end visibility. For example, data-driven real-time tracking can improve the delivery process. It allows customers to choose their most convenient pick-up location for shipments. More transparency and better communication leave less room for errors.
Building resilience for the future
Enabling teams with technology is more important in today’s business landscape than ever. With the current supply chain issues and cost-of-living crisis, businesses need to embrace supply chain 4.0 to help them respond to change. It’s a valuable investment, as there will always be trends and disruptions that encourage businesses to adapt their ways of working.
Ultimately, supply chains need to be fast, flexible, and efficient. With the unique features of supply chain 4.0, organisations can use automation to transform their supply chain and build resilience for the future. Investing in a collaborative platform that shares real-time data will improve supply chain quality, increase efficiency, minimise risks and ensure growth for all stakeholders.