Retail Leaders Embrace AI to Transform Supply Chains

Symphony RetailAI released its findings of its Strengthening the Retail Supply Chain survey of North American retailers. 

The survey found the key challenges in supply chain management for high-volume retailers, shedding light on issues like disparate, disconnected systems, poor demand forecasting accuracy and the inability of current technologies to support business growth. The study also provides insight into the reasons why retailers believe that a new generation of AI solutions can help overcome challenges and where the technology will have the greatest impact. 

A majority of retailers surveyed currently have confidence in their allocation and inventory planning software, however, 48 percent claim their forecasting technology was average to very poor. Few retailers have established a unified process of supply chain components working together. 

A main challenge that the survey found is that retailers lack connected systems. Nearly 36 percent of respondents indicated that they have separate demand planning, replenishment, allocation and order management systems for store and e-commerce orders. Also, 28 percent reported that they don't manage each module on the same platform, making it clear that disparate demand replenishment systems are a significant burden to efficiency. 

The pace of innovation is also a significant issue, with only 43 percent of retail supply chain professionals saying their technology can't keep up with business demand. Also, 42 percent describe less-than-optimal synchronization between their inventory and channels, while many worry about fulfillment complexities, stocking inefficiencies and high product lead time. 

Surveyors suggested that when they do invest in technology, they most likely spend on systems that increase stock availability and decrease stock holding. They survey said that 44 percent of supply chain professionals invest in new technology because their existing systems are unable to sustain new growth. 

Meanwhile, the survey found that 43 percent of respondents lack real-time visibility of all supply chain inventory. On the plus side, six in 10 professionals claim their organization is actively taking steps to address this hurdle and increase inventory visibility. 

AI and machine learning holds tremendous amount of potential to improve supply chain efficiency. A majority of retailers are already investing in the technologies as it has the potential to improve supply chain management relating to quality and speed of planning insights. 

The survey found that one in three professionals have incorporated AI capabilities into their supply chain management processes, while one in four is working toward it. AI is expected to enhance every link in the supply chain, delivering faster, more reliable demand insights, unparalleled quality management capabilities and real-time updates along the way. 

“Today’s retail supply chain is being reinvented because of the complexities of providing goods to customers,” says Patrick Buellet, Chief Strategy Officer, Symphony RetailAI. “As grocery retail evolves to become more of a destination for shoppers, supply chain efficiency is more critical than ever. There’s also a constant backdrop of rising cost of goods, which cannot simply be passed on to the customer. And today’s increasing focus on fresh and prepared meals adds additional challenges of accurate forecasting to meet customer expectations. Even though retailers are challenged by the pace of innovation, winners are investing in new technologies, particularly artificial intelligence and machine learning. These can boost productivity, and greatly improve the accuracy of information for better decisions throughout the supply chain.”

To read the full report, please click here.