Retail industry leaders see the writing on the wall - adding digital to their brick-and-mortar-based business strategy is the only way to keep up with the ever-increasing demands that come with the growing number of omnichannel customers.
In the retail landscape, every business decision revolves around customers – a personalized retail experience to capture their attention, an omnichannel presence to keep them engaged, and outstanding customer service to retain their loyalty.
However, despite knowing the benefits of going digital, retailers are slow to adopt newer technologies that will enable them to adapt to the customer’s needs. So, what can retailers do to differentiate themselves from the competition and deliver the exceptional experience that customers expect? The answer is Digital Transformation.
Needless to say, this unprecedented pace brings along benefits and challenges for the retail industry players. Leveraging new technology involves much more than creating an online store. To help the forward-thinking players, we've put together key insights on why digital transformation is important for retailers to stand out from the competition.
The following factors played an integral role in accelerating the pace of digital transformation in the retail sector:
Growing customer expectations: Companies like Amazon and Uber have raised the bar on personalized customer experience. With a range of e-commerce fulfillment models, including 'order online and pick from the store,' that require massive coordination between retailers and logistics providers, these companies are driving their supply chains with an increased focus on digital capabilities.
Changing tech trends: Advanced data modeling and analytics enable closer coordination between supply chain partners. Software providers are developing applications that can provide visibility in several areas, including shipment, hand-off points, local supply disruptions, and the end-to-end supply chain.
Lower commodity pricing: The push to lower commodity pricing is driving the review of raw materials, distribution, and production. This leads to application enhancements for acquiring more accurate information on suppliers.
Improving speed to market: Product lifecycles are getting shortened, making it more critical for supply chains to provide accurate information on the design cost, materials, manufacturing, and services.
Building an ideal digital transformation strategy that covers all the market dynamics is not easy for businesses. There will be challenges. But by overcoming these hurdles, companies can create the shock absorbers that their supply chains desperately need.
Digital transformation is heralding a new era in supply chain management in which manufacturers and retailers collaborate in entirely new ways and leverage technologies to blur the lines between the physical and digital worlds.
Supply chains globally have come a long way since the mid-90s. Back then, if you needed rice, you'd go to the village grocery store. If you wanted medicines, you'd visit the next-door chemist.
Then came the industrial revolution, and with it came roads and modes of transport that made it easier and quicker to supply goods across geographies. However, some things remained old school. For instance, data on supply chain operations continued to be managed manually. That changed around the late 1900s with the advent of computers and software like spreadsheets. Later, ERP systems simplified complex tasks like inventory management, order tracking, and logistics.
The digital element started building in supply chains almost a decade ago when the companies in the retail environment found themselves in a troika of problems - sudden demand spikes from customers, remote employees, and cities under lockdowns. Overcoming these challenges seemed difficult with outdated technologies and mostly unorganized supply chains. This was when companies started to invest in technologies like Artificial Intelligence, Machine Learning, Cloud, and Control Towers. This not only helped them manage remote employees and handle the supply chain disruption but also allowed them to get greater visibility on their end-to-end supply chain.
Some companies were able to deploy "multi-enterprise supply chain networks" to gain visibility that goes beyond Tier-1 and Tier-2 suppliers. This helped the companies meet customer demands, increase efficiency, reduce risks, boost ROI, and leverage opportunities.
These capabilities allow companies to manage their upstream and downstream value chains more effectively and respond faster to unforeseen events.
Organizations must have a real-time and predictive supply chain digital transformation strategy to meet their target audiences’ demands while keeping the supply chains prepared for potential disruptions. Now is the time to leverage advanced technologies that tell manufacturers what their target customers want, how much they are willing to pay for it, and when and how they want it. This understanding is the foundation of building a centric-centric supply chain.
Having a customer-centric supply chain means meeting the customers on their terms rather than making them settle for yours. It's about transparency and sharing information with customers without making them reach out to your helpdesk for basic information.
Building a customer-centric supply chain also means improving your business operations and ecosystem. Leveraging technologies can help retailers and manufacturers handle upstream and downstream of their supply chain while achieving efficiencies and cost savings. An excellent example is using advanced technologies and predictive intelligence to solve supply chain challenges, such as reducing backhauls and empty miles.
According to a study by Gartner, over 80% of companies are planning to transform digital supply chain capabilities in the next few years. The digital transformation will also allow organizations to re-align their business demands and alleviate the strain of increased customer expectations on their operations. While ambitious, this shows the importance of supply chain management in this customer-first world.
According to a survey by Deloitte, here's what business leaders think:
Overall, business leaders are optimistic about the impact of Industry 4.0 and are taking steps to adopt its technologies. However, they also recognize the potential for job losses and are taking steps to mitigate the impact.
Rankings aside, these technologies aren't competing. Instead, they work in concert. Each one of these technologies is essential for enabling the digital transformation of supply chains and has the potential to produce vital benefits across the entire delivery spectrum.
For instance, data generated via advanced analytics and enabled by the IoT can lower net working capital costs in logistics and planning. Together with augmented reality, robotics, and wearables, IoT devices can accelerate response times to avert potential supply disruptions or deviations. Robotics can optimize raw materials usage and reduce error rates on the factory floor, while 3D printing can add flexibility to the design process. Structured collaboration tools and marketplaces can allow value chain partners to operate in an integrated fashion. Crowdsourcing can enhance sourcing flexibility and resilience to the supply chain while improving asset allocation and lowering logistics costs. IoT devices and smart sensors gather and share data, which is stored and organized in the cloud, where big data analytics and AI are applied to improve and expedite business decisions. Everything is part of a self-optimizing ecosystem.
AI-powered prescriptive and predictive will play a key role. The progression will go from "what has happened" to "what will happen" and "what should happen," creating autonomous reactions to adapt toward the desired future state.
Headless commerce is quickly emerging as the future of online retail, offering businesses unparalleled flexibility and control over their e-commerce operations. In a traditional e-commerce setup, the front-end and back-end of an online store are tightly integrated. This means that any changes made to the front-end, such as the design or user interface, require corresponding changes to the back-end.
On the other hand, Headless commerce separates the front-end and back-end, allowing businesses to manage each independently. This approach gives online retailers greater flexibility and agility, allowing them to easily adapt to changing customer needs and market conditions.
Having the opportunity to entirely customize the user experience is one of the main advantages of headless commerce. Businesses are constrained by the capabilities and functionality offered by their e-commerce platform when using a typical e-commerce configuration. With headless commerce, however, companies may construct their own front-end utilizing the most recent web development technologies, giving customers a distinctive and enjoyable buying experience that distinguishes them from rivals.
The simplicity of the system and technology integration is another benefit of headless commerce. Integrating with other systems can be a labor-intensive and complicated procedure in a typical e-commerce setup, frequently requiring special development work. Businesses can use headless commerce to connect with other systems fast and easily by utilizing APIs and other connection tools.
Scalability and performance advantages come with headless commerce as well. Businesses can scale each component independently because the front-end and back-end are separate, ensuring that the online store can accommodate increased traffic and transaction volumes without degrading the customer experience.
Headless commerce, which gives companies more flexibility, customization, and control over their online retail operations, represents a significant transition for the e-commerce sector as a whole. Headless commerce is positioned to replace traditional online retail as customers desire more personalized and interesting buying experiences.
Data transformation is a crucial component of digital transformation as it involves converting data into a usable and valuable format for analysis and decision-making. Effective data transformation enables organizations to access, integrate and analyze vast amounts of data from multiple sources, leading to improved insights and informed business decisions. It also allows organizations to streamline their operations, automate processes and make data-driven decisions, ultimately leading to improved efficiency and competitiveness in the digital age.
A critical step in moving beyond disconnected stakeholders across the supply chain and customer experience is to embrace data sharing. Towards this goal, a restricted mindset with a specific vendor base is a roadblock; collaboration is the path forward.
Organizations that are committed to the digital transformation of supply chains and online stores must find committed partners who are invested in exploring and offering cutting-edge digital transformation services and solutions. Look for partners that are leveraging advanced technologies and establishing clean, comprehensive data streams needed for efficient supply chains for retailers. Also, invest in people to deploy, support, and optimize solutions to help the business manage change and thrive in the fourth industrial revolution.
Like the globalization wave that preceded Industry 4.0, the ongoing supply chain and retail evolution might take several decades to unfold. And it might look different across industries, sectors, and regions. However, one thing is clear: digital transformation has the potential to change established supply chain models worldwide radically. Given the enormous impact of external forces affecting global economies, manufacturers and retailers need to accept that change is happening – and that there will be winners and losers in this process.
Digital transformation has had a significant impact on supply chains, customer experience, and store experience. Let's explore each of these areas in more detail.
Digital transformation has revolutionized supply chain management. Companies are now using advanced analytics, machine learning, and artificial intelligence to optimize their supply chains. This has enabled businesses to streamline their operations, reduce costs, and improve efficiency. Supply chain visibility is also a critical aspect of digital transformation, allowing companies to track inventory and shipments in real time, ensuring that goods reach their destination on time.
Digital transformation has changed the way customers interact with businesses. The rise of social media, mobile apps, and other digital channels has given customers more options than ever before. Companies can now provide personalized experiences that cater to each customer's unique preferences and needs. This has made it easier for businesses to build brand loyalty and attract new customers.
Digital transformation has also impacted the in-store experience. Retailers are now using technologies such as augmented reality, virtual reality, and facial recognition to enhance the shopping experience. These technologies help businesses provide personalized recommendations to customers, create immersive environments that stimulate the senses, and reduce wait times at checkout.
On the one hand, advanced technologies like artificial intelligence, big data analytics, cloud, and the Internet of Things (IoT) are pushing into the market. On the other hand, increased customer expectations, employees, and stakeholders are pulling companies to develop reliable and responsive supply chains.
Companies across industries are investing heavily to develop their versions of digital supply chains. According to a study by PwC, almost 33% of respondents say their companies have started digitizing supply chains, and 72% expect to do so five years from now.
The reasons behind this rush are apparent. Business leaders expect the digital transformation of supply chains to bring significant economic benefits to the top and bottom lines: Companies with digitized supply chains can expect efficiency gains of 4.1% annually while increasing revenue by nearly 2.9% annually.
Some industries are further along the supply chain digitization journey than others. Electronics manufacturers, for instance, have learned a great deal about building and managing digital supply chains through their long-standing efforts to create outsourced networks. But consumer-facing companies are not so advanced and are vulnerable to severe disruptions in supply networks. Yet, these industries, along with asset-intensive industries like chemicals, are working to transform their chains through planning.
Increasing customer expectations around quality of service and personalization are making global supply chains more complex and uncertain. To live up to the C-suite's growth agenda, supply chains must be agile, highly responsive, and flexible. This calls for seamless collaboration between partners, real-time visibility into opportunities and risks, and closed-loop adaptive planning.
A lot of retailers are already making progress in these areas. Technological advancements such as the cloud, the Internet of Things (IoT), and big data have turbocharged supply chains. Supply chain management is at a tipping point with the influx of data and digital technologies. It is now possible to gather, store, analyze, and share data in real-time to make faster and more effective decisions. The subsequent development is a shift from transactional to cognitive supply chains – these are the future supply chains.
However, some retailers are still struggling to upgrade their supply chains to make them agile and cognitive. Taking a step-wise approach to supply chain digitization can help these retailers orchestrate transformation:
Production planning: The first step to making your supply chains agile and cognitive is to identify production lead times – the time between placing a purchase order to the manufacturer completing the order.
Successful companies keep two things in mind:
A short production time is better than a long production time as it ensures quick delivery of products.
Finding the right (preferably local) manufacturer can help save hundreds of thousands of dollars and reduce operational risks.
Supply management planning: The next step is to plan and manage the supply of finished goods to meet customer demand. Inventory management requires a great deal of planning. But e results are worth it. Right-sizing the inventory will help you keep logistics costs low and avoid fulfillment delays.
However, most companies face the following challenges in supply management:
Under-ordering inventory, resulting in out-of-stock issues and long waiting lists
Over-ordering inventory resulting in high inventory carrying costs and risks of outdated or expired products
That’s why having the right inventory forecasting tools and technology is essential.
Operation planning: This is the most complex step in creating an optimized, lean supply chain.
The first step in this puzzle is to decide on the best location for the warehouse. Do you want to store inventory, rent a warehouse, do dropship orders, or partner with a third party?
Only fulfilling from one warehouse may seem convenient or cost-effective, but as order volume grows, it can be a big challenge. Splitting inventory across multiple warehouses can spread risk and serve faster, but the cost will increase.
Virtual customer service: Virtual customer service has become increasingly important as people seek assistance remotely. Businesses have implemented Chatbots, online chat, and video conferencing to provide customer support without having to meet in person.
Personalization: Personalization has become more critical than ever as businesses seek to create more meaningful interactions with customers. Advanced analytics and machine learning have made it possible to create personalized recommendations, product suggestions, and marketing messages that resonate with individual customers.
Increased investment in supply chain tech: While warehouses are expanding and order volumes are growing, the workforce pool is shrinking. But the challenge is not just recruiting; delivering parcels and working in a warehouse must be made more desirable to retain staff. In 2023 and beyond, investment in technologies to support employees, such as robotics, vision and camera-based technology, multi-modal technology, wearables, and electronic proof of delivery (ePOD), will be critical. These technologies will help optimize employee productivity and increase accuracy.
Investment in Supply Chain Technology: The expanding warehouses and growing order volumes are creating a shortage of workers in the industry. To address this challenge, there needs to be a focus on making warehouse work more appealing, not just in terms of recruitment, but also in terms of working conditions. In the coming years, investing in technologies that enhance the employee experience will be crucial. This includes robotics, vision and camera-based systems, multi-modal technology, wearable devices, and electronic proof of delivery (ePOD). These technologies will boost employee productivity and accuracy.
Rise of SCaaS: Currently, most companies handle their supply chain activities in-house. As we advance, we’ll see more businesses adopting Supply Chain as a Service (SCaaS) business model and outsourcing key activities like logistics, manufacturing, and inventory management. Companies’ supply chain management teams will evolve into a smaller group of skilled individuals focused on making strategic decisions to optimize the end-to-end supply chain. As in-house supply chain teams become smaller, control towers will become more prevalent. These digital control towers will give supply chain managers an end-to-end view of the supply chain. In addition, the Cloud technology will allow supply chain managers to access the data they need in real-time.
Focus on collaboration: Collaboration is critical for businesses to manage risk and resolve disruptions across their supply chain. Toward their goal, companies will adopt modern tools to help them respond to changing conditions with agility, create more accurate forecasts, develop capacity plans, and monitor quality concerns. However, the collaboration will be both internal, i.e., within the organization, and external – with suppliers, partners, and customers.
Integration of Blockchain technology: To overcome visibility-related challenges, many businesses will consider integrating blockchain technology into their supply chains to minimize disruptions and improve customer experience. Through blockchain, the critical components of the supply chain can be integrated into a single platform, resulting in increased transparency. Shipping lines, carriers, forwarders, and logistics providers can use the same platform to update companies and customers on the product journey. Invoicing and payments can be made from the same system, too. This integration streamlines the entire supply chain and helps supply chain managers identify issues before they occur.
Use of predictive technologies for autonomous planning: Businesses have started to embrace next-gen applications incorporating AI, ML, and data analytics to accelerate decision-making and pave the way for autonomous planning. As per a McKinsey survey, 90% of supply-chain executives expect to overhaul IT within the next five years and plan to use AI and machine learning in planning. No doubt, updating will make supply chains more efficient and resilient. Top applications for AI and ML include demand planning, control tower, and sales and operations planning.
Building automation across the value chain: This doesn’t mean the entire supply chain will be automated. There will always be people involved in operations. However, the degree of automation will move from ‘minimal’ to ‘optimal.’ Instead of using disconnected, point solutions to automate the different steps in their supply chains, organizations will look at the entire process holistically and opt for solutions that enable a more connected, contextual automation.
Its high time manufacturers look at their existing operating models –from demand forecasting to warehousing and identify gaps in legacy ways of working. The next step is to build more transparency and intelligence across the supply chain ecosystem – both within the organization and with the external network. Taking the right actions at the right time and using the right technologies will help manufacturers reshape their supply chains and evolve into resilient, digitally enabled, and agile organizations.
Omnichannel retailing is shifting the way customers shop. In response, retailers are also redesigning their supply chains to meet customer expectations in the new digital world.
Offering an engaging omnichannel experience used to be a differentiating factor for retailers. Now it's a survival trick for them. COVID-19 accelerated the new way of shopping online and picking in-store – a habit most customers plan to continue. Most customers today don't think of traditional boundaries and increasingly evaluate retailers on seamless shopping experiences. This is one of the reasons 74% of retailers are sharpening their omnichannel strategies, per a report. Those not thinking about adopting one will likely drive in the slow lane.
An omnichannel strategy connects a brand's touchpoints - physical outlet, website, social media handles, email, and mobile – and enables customers to move seamlessly between these points without encountering dead ends. In short, an omnichannel strategy breaks down traditional boundaries to put the customer at the heart of the journey.
In addition to creating a frictionless, synchronized customer experience, a well-planned omnichannel strategy empowers retail companies to expand their customer outreach cost-effectively. Marketing teams will be able to deliver their content to the target audience successfully, sales teams can convert and nurture customers more effectively, and operations teams can fulfil orders more efficiently.
Globally, retail companies are already implementing omnichannel strategies. A purely online brand – Amazon – has also started opening brick-and-mortar outlets in the US. Leveraging advanced technologies like AI and IoT, these outlets allow customers to shop independently without the stress of checking out. This also helps the company to keep track of customers' shopping habits, send relevant offers, and provide a customized shopping experience. As a result, customer retention and brand loyalty are greatly improved.
Being omnichannel means connecting all touchpoints in the customer journey – online and offline. While brick-and-mortar stores are here to stay, an internet-based virtual store will be the next big thing. In fact, the future of online shopping will be the 'meta' world where a customer will have a virtual avatar, visit a virtual outlet, try products, engage with a virtual salesperson, place an order, and pay through a digital wallet or cryptocurrency. The product would get delivered to their real-world address.
Simply put, the Metaverse is a massive mall with limitless shopping opportunities. It is about creating a virtual storefront to sell products by offering novel customer experiences and ensuring your brand's online presence is searchable. This also means that retailers' drive-to-store strategy will transform into a login-to-Metastore.
While Metaverse in retail is yet to arrive, different ways to experience the Metaverse are already available. Some of it can be shared with the help of virtual reality (VR) or augmented reality (AR) technology, which blends the real and virtual worlds by using VR headsets or AR goggles. Some advanced e-commerce platforms even feature sensors that translate real-world gestures to virtual-world avatars.
Gen Z shoppers are remodeling the retail landscape faster than ever before. Displaying powerful behavior patterns, these young shoppers quickly switch brands and are open to exploring newer shopping channels. However, these shoppers look for more than cross-channel connectivity and convenience when choosing a retailer – they want better and unique experiences. These shoppers are not just browsing through websites but also taking notes. And to win their loyalty, retailers will have to raise their game.
Gen Z is paying the most attention to the following five areas where the margins for error are almost zero for retailers:
Retailers must reinvent and innovate in the above-mentioned areas to meet customers' expectations.
Redefine shopping channels: To provide a seamless experience to customers, retailers can identify the weakest links and work to strengthen them. Retailers could integrate back-office processes, such as inventory management systems, with stores and build reporting and tracking capabilities.
Invest in automation: Retailers must understand services that build or break the customer experience. Do customers prefer self-service or value consultative selling? How experienced are the in-store associates? The answers can help guide automation investments.
Speed-up deliveries: Retailers should determine the logistics based on customers' delivery expectations. Retailers must also devise mechanisms to frequently update customers about their products' status and estimated arrival time.
Prioritize diversity: Every retailer must review diversity in staffing, specifically in leadership positions. Based on baselines, the company should set goals, create plans, and define performance indicators (KPIs) to measure progress.
Up the ante on hiring: With competition for talent fiercer than ever, retailers must take up their game on hiring, training, and retaining employees. Compensation is significant, but talented employees demand much more than money, including flexibility and a sense of purpose.
The disruption of technology and its impact on shoppers' behavior has real implications. How retailers need to adapt their strategies in order to build meaningful and successful relationships with shoppers will be their formula to stay in the race.
Here are the essential four ways retail technology is altering shoppers' behavior and what they mean for retailers:
Shopping apps: Mobile phone-based purchases are outpacing the growth of online retail. In addition to enabling better shopping experiences, smartphones connect in-store and online modes of shopping. In addition to basic product information, shoppers have access to loyalty programs, real-time store inventory, and enhanced customer engagement. This convenience is irreplaceable and influences shoppers' buying behavior.
Payments apps: Mobile payment apps provide a seamless experience to shoppers due to their ease of use, security features, and rewards and discounts offered by such apps.
Social networks: Social networks have made giant leaps in the retail world – from staying in touch with brands to accessing the latest information to keeping up with the latest fashion trends. Most shoppers frequent social media to familiarize themselves with the product. The additional benefit of product recommendation and purchase is a trend that shoppers are making the order of the day.
Voice recognition: Voice-enabled searches such as Amazon's Alexa and Apple's Siri are changing how shoppers look for products. Searching for products using natural speech makes the entire process much more convenient, faster, and frictionless, driving shoppers' buying behavior. Another critical aspect of changing shopper behavior is virtual reality, which allows customers to experience the product in the virtual world, giving a more realistic picture of the product they intend to purchase.
As retailers prepare for the new normal, the first step is a mindset change. Retailers must pivot to the customer, putting them at the heart of business decisions and enhancing the customer journey, for which the digital transformation of the supply chain is a must. Rewriting the retail rules means responding to the challenges with creative solutions. The new omnichannel strategies can help retailers manage surges in demand and prioritize the customer experience for long-term success.
Businesses continue to face increased pressure due to shrinking margins and shortening delivery cycles. It’s more critical than ever to build resilient supply chains powered by data analytics and automation.
Supply chain and store management is a vital piece of the puzzle for business success - not only because it impacts a company’s ability to provide a positive customer experience but also because it affects the overall profitability.
Given the immense importance of supply chain efficiency, many businesses have stepped up their supply chain management (SCM) efforts. They’re looking for opportunities to make processes cheaper, faster and easier in the long journey from a supplier or a vendor to the end customer. This is especially relevant as supply chains have become more complex over time—businesses work with international partners and face pressures to deliver products as quickly as possible.
Supply chains involve many people, activities, and organizations, producing large amounts of data. This is where supply chain analytics come in—to turn the overwhelming amount of data into easy-to-understand dashboards and reports that help in business decision-making and lead to better results.
According to a report, the global supply chain analytics market is expected to grow at a CAGR of over 17% between 2022 and 2030. One of the critical reasons for this growth is the increasing need for businesses to optimize their supply chains. Toward that goal, they will require data-driven insights that only analytics tools can provide. Other factors driving the growth of analytics in the supply chain are businesses moving towards digital models and using automation to enhance operational efficiency.
Before we dig deeper into how supply chain analytics can help businesses, let’s first understand what exactly supply chain analytics is and how it works.
Supply chain analytics refers to the analysis of information businesses draw from various applications and systems tied to their supply chain, including procurement, store and inventory management, order management, warehousing, and logistics.
Each function or system mentioned above may have reporting capabilities that elucidate that specific step in the supply chain, such as estimated lead times for suppliers, current stock levels in the warehouse or orders delivered per hour. However, supply chain analytics are most potent when all these internal systems are integrated, usually via a cloud-based Enterprise Resource Planning (ERP) system. The ERP can present your global supply chain data through reports or dashboards. These reports give employees a comprehensive view of the logistics network and enable them to understand the upstream and downstream effects of disruption, allowing them to mitigate such issues as quickly as possible.
Look at it like this: A supply chain is like dominoes, where each step affects the one that follows it. By digitizing and automating the supply chain, businesses can identify vulnerabilities and have safeguards to avert a domino effect. Ultimately, any problem at any stage could impact the company’s ability to meet customer expectations.
With the advancement of technologies like smart sensors, RFID tags, and IoT, the importance of supply chain analytics is bound to grow. These new sources of information will enable more profound insights into complex systems and pave the way for more robust, faster and more resilient supply chains.
Several use cases for supply chain analytics exist — and the number will continue to grow as forward-thinking businesses embrace the opportunity for machine and human collaboration. Ranked as one of the top business supply chains, Schneider Electric has deployed a supply chain data platform within its control tower to integrate internal and external data in real-time. This newfound value in analytics allows Schneider Electric to achieve complete visibility of the end-to-end supply chain. Ultimately, it helps the company boost agility, manages supplier relations, and ensure intelligent decision-making.
Analytics is coming up in a big way as technologies like AI and ML use volumes of data from devices, people, and assets across the supply chain to automate processes and decision-making. Meanwhile, predictive analytics empowers employees to make more real-time decisions and drive innovative business models.
From smart factories featuring 5G to smart products across the stores, analytics and automation have a lot to offer businesses keen to invest in these technologies.
The coming years will bring greater focus on companies using analytics within their supply chains and stores, and into the hands of customers leveraging smart products and devices it enables. Here are some of the ways analytics and automation are and will continue to disrupt supply chain management:
More accurate demand forecasting: Demand forecasting is one of the critical steps in building an efficient supply chain that can be automated with analytics and data science. Automation helps businesses respond quickly to market fluctuations and maintain optimum stock levels. Advanced technologies like machine learning and Blockchain empower supply chain tools with features to streamline payments, processes, and operations. Modern platforms use historical data to study sales trends and forecast demand for different products, warehouse requirements, and locations in real-time. AI-powered big data analytics platforms aid automated inventory alerts and suggest order quantities based on forecasted demand.
Improved efficiency: Analytics and data science play an integral role in gauging organizational performance. If implemented correctly, big data can help organizations track, analyze, and share workforce performance metrics in real time. Businesses can identify employees struggling to maintain a consistent performance using IoT-enabled badges that exchange information with sensors installed in production units. Data analytics can also pinpoint opportunities and inefficiencies at every stage of the production process. Managers can track underperforming elements and resolve them to enhance productivity. Also, with better insights at every level, managers can perform predictive analysis for preventive maintenance and avert prognostic failures.
Streamlined sourcing and supplier management: Data science-powered SCM systems enable businesses to collate data on multiple suppliers and gain insights into the historical data of suppliers. Data analytics allows companies to select and manage suppliers in the system and integrate real-time information on traffic and weather to avoid delays and deviations in delivery patterns.
Improved warehouse management: Warehouses are adopting modern technology and installing sensors to gather data on the inventory flow. The data collected by automatic sensors is analyzed to optimize stock and improve warehouse safety. With sensors installed in warehouses, managers can quickly identify bottlenecks in the workflow and work to resolve them with extensive data-fueled systems. In addition, robotic warehouses infused with big data analytics offer better warehouse management.
Better distribution and logistics: Order fulfilment and traceability are crucial to business productivity and customer satisfaction. Traditionally, logistics have been cost-focused and looked for ways to give them a competitive advantage. Data science solutions allow logistic providers to leverage analytics to improve operations. With GPS technology, for instance, businesses can track the real-time routing of deliveries and reduce waiting times by allocating nearby warehouses.
On the other hand, more tactical processes can be implemented to cut costs and reduce carbon emissions by adhering to suitable transportation modes. Delivery routes can be optimized by integrating data from diverse geo-locations, weather reports, personal schedules, road maintenance data, and vehicle maintenance into the system that advises managers to reroute to the next best route.
Digital transformation in retail and supply chains is not a single-step process. Instead, it is a continuous journey. Businesses have started implementing advanced solutions to unlock the value of data analytics with modern approaches and deep domain expertise. Harmonizing SCM analytics will put companies on a path to automating their operations. This disruptive digital transformation will create happier and more satisfied customers.
For all the effort that businesses are putting in to improve the efficiency of their supply chains, only 21% of companies are planning to automate their supply chain processes and power them with analytics in 2022, according to a PwC report. Others are still looking for ways to increase efficiency and manage/reduce costs by streamlining their supply chains. Are their priorities misplaced? Or are they not able to find the right starting point for digitizing their supply chains and inventory?
Digital transformation of supply chains is key to maintaining efficiency, competitive advantage, and future-proofing your operations against shocks. More importantly, digitization helps companies act quickly on opportunities in a fast-paced environment.
Implementing digital transformation in supply chains and online stores involves leveraging digital technologies to automate and optimize processes, enhance customer experiences, and drive business growth. Here are some steps that can help organizations implement digital transformation in supply chain and online stores:
Most businesses understand the benefits of digitally transforming their supply chains. But they often struggle to know how and where to start. So, how can they kickstart digital transformation for a resilient, future-proof supply chain?
Building a digital supply chain is not just about the physical processes and assets. It's also essential to have an organizational structure that can support advanced tools and systems for tracking inventory or making payments on invoices. It might take time and demand effort, but a digital transformation will make your business more effective and lead back downstream to increased productivity and higher revenue.
Understand the industry landscape and the company's starting point: It is an excellent point to start when shaping a digital strategy. For example, many companies begin with legacy IT systems. Replacing these with the latest digital tools can help improve responsiveness, generate new revenue, increase efficiencies, and significantly reduce the total cost of ownership (TCO).
Leading companies develop data analytics and IT systems to support their digital transformation strategy and business goals. They pursue strategic goals with near-term value while adopting a clear view of the digital destination. This makes them ready to pivot as the industry evolves.
True, forestalling change is a strategic leap into the future. But most companies can gauge what their business may look like in 5 or 10 years. The 2-year vision is usually more realistic, while the 5-year and 10-year visions are often conceptual.
Assess the existing supply chain: The vision for digitally transforming its supply chain provides reference points to the company to plan the second step: an end-to-end assessment of the supply chain and its technical capabilities. To make the evaluation effective and straightforward and identify capability gaps, companies can ask the following questions in five categories:
Data- Are we gathering enough data to facilitate our vision? Can the stored data be easily accessed and used?
Analytics- Do we have the analytical capabilities to gain valuable insights from our data?
Software and hardware- Do our systems enable the process and analytical capabilities that our business requires?
Talent- Are we attracting, developing, and retaining the “digital” talent to run and transform our supply chain?
Processes- Do we have the right processes across supply-chain subfunctions? Are those processes defined and understood by all stakeholders?
Traditional supply chain evaluations rely on interviews and surveys of employees and partners and manual data analysis. With digital technologies, companies can perform more profound, insightful assessments. Off-the-shelf analytics applications can be used to analyze large sets of data and extract reliable insights. These initial efforts can have benefits beyond the assessment phase. Companies can leave the applications they install for their assessments in place and continue to use those applications as “one-click” diagnostic tools for ongoing performance monitoring.
Spot the gaps: Identifying the ideal future state for their supply chain allows companies to identify missing capabilities and start building them. Companies that make suitable short-term investments to improve supply chain performance often generate significant savings to fund long-term investments.
A leading specialty retailer used that technique when an outdated supply chain created problems for direct-to-customer businesses. The company had ignored its supply chain for years, and its infrastructure was in bad shape. Most of the company's orders arrived later than promised, and customer loyalty was eroding rapidly. As a result, service quality was far inferior to that of digital-savvy competitors.
The leadership team realized the need to replace more than half of its outdated distribution centers with high-performing ones, but it couldn't make the entire investment at once. It started with the five largest distribution centers, invested in digital tools, and established best-in-class distribution processes. The pilot improved service levels and reduced costs.
Close the existing gaps: Leading companies create a portfolio of near-term and longer-term opportunities to help them close the gaps between the existing supply chain and the future state. For instance, they may choose to outsource some aspects of the supply chain to reduce the complexity of serving specific segments. Or they may consider closing gaps through one common IT platform that supports numerous elements with specialized capabilities to particular business units.
A national-level food manufacturing company for numerous convenience stores used this approach to reverse its declining sales. The company's fundamental problem was matching demand with the manufacturing plan. It lacked data about products that were selling fast and the ones that were sitting on the shelf for months.
The company contemplated different options to improve its capability to meet customer demands. Investing in intelligent forecasting tools could improve accuracy but would not eliminate uncertainties. Advanced manufacturing technology could reduce cycle time, but the company also needed to forecast sales. The leadership team then invested in digital tools to connect the sales and delivery teams with central planning and manufacturing. The new system identified products selling nearly in real-time, giving both teams more visibility into demand. This helped the company manufacture the right products to fill empty shelves and increase sales.
Build a balanced roadmap: One of the critical challenges for leadership contemplating a supply chain upgrade is identifying near-term steps to secure future innovations. Successful companies build short- and mid-term roadmaps with concrete initiatives that can deliver benefits and provide flexibility in reaching long-term goals.
Businesses keen to start down the path toward a digital supply chain can begin by debating three questions:
What will our business look like in three years, and what supply chain capabilities do we need?
How will digital tools help us create robust business models?
What key high-value digital moves should we focus on?
The answers will provide valuable context for building a supply chain that will be competitive for years. Successful businesses set the direction and remain nimble. Adaptability and flexibility are more crucial than precision. After all, market conditions may change, and new competitors may emerge. But those who can turn disruption into opportunity will emerge as winners.
Businesses are rethinking ways to meet the growing and ever-changing customer demands. A digital supply chain can keep your operations resilient, flexible, and efficient.
It's never too late to kickstart your digital transformation, and there are many reliable and reputed digital transformation services companies to help you. With tech innovations focused on automation and optimization, their digital transformation service offerings can help you stay ahead of the curve and experience immense growth.
Enabling Retail Transformation through Data-driven framework
With augmented analytics driving the "retail everywhere" landscape, the absence of smart analytics can make retail business transformation a challenge.
While retailers are moving toward digital transformation, they need a partner to transform their long-term vision into strategic goals. As one of the most innovative digital transformation companies, JK Tech is well-positioned to help retailers define their roadmap to success and architect the right frameworks and solutions for sustainable and superior customer experiences.
JK Tech's digital transformation (DT) framework is a non-intrusive, automation-centric transformation framework to accelerate retailers' "Source to Insight" journey. The DT framework is focused on aligning digital solutions for retailers' goals and realizing a quick ROI.
JK Tech provides technology solutions that enable companies to optimize their price recommendations. Our price recommendation solutions help companies understand customer behavior, market trends, and competitive insights, enabling them to set prices that are both competitive and profitable. These offerings provide real-time price optimization capabilities, allowing businesses to quickly respond to market conditions and customer demand changes. By leveraging JK Tech's optimized price recommendation solutions, companies can improve their margins, increase customer satisfaction, and stay ahead of the competition in today's fast-paced and ever-changing digital landscape.
With real-time data analytics, JK Tech's offerings allow organizations to make data-driven decisions that can improve supply chain efficiency and reduce waste. These solutions also provide real-time visibility into inventory levels, enabling organizations to quickly respond to changes in demand and adjust their inventory levels accordingly. Ultimately, JK Tech's offerings help organizations to achieve a more agile, responsive, and profitable supply chain.
One of the key offerings that JK Tech provides is personalized recommendations. This technology leverages data and machine learning algorithms to offer tailored product recommendations to each customer based on their unique interests and buying history. This not only helps increase customer satisfaction, but it also drives sales by presenting customers with relevant products that they are more likely to purchase. By providing personalized recommendations, JK Tech is helping its customers retain their customers and grow their businesses.
JK Tech provides retail companies with advanced technology solutions that aim to enhance store performance. These offerings include a range of tools and technologies that help retailers optimize their operations, streamline processes, and provide a better shopping experience for their customers. Whether through cutting-edge in-store technology, such as interactive displays or through the implementation of data analytics solutions, JK Tech's offerings help retailers stay ahead of the curve in a rapidly changing industry. By leveraging these technologies, retailers can boost store efficiency, increase sales, and stay ahead of the competition in the highly competitive world of retail.
Leveraging the DT framework, retailers can define their digital strategy and redesign their customer experience at any stage, from acquisition and engagement to retention. In addition, the framework also enables retailers to monitor supply chain movements, assess customer demands, build patterns, and check inventory levels by providing data-driven insights.
Through the power of big data analytics, cloud, business intelligence, modernization, and tailored algorithms, this framework can help retailers unleash business value across the ecosystem. The digital transformation experts at JK Tech can support retailers in streamlining processes across supply chains, improving the omnichannel experience, and accurately understanding customer behavior while reducing costs, lowering risks, and providing a faster return on investment.
The importance of having clean data cannot be overstated, as insufficient data is one of the most common causes of implementation failures. Preparing for a supply chain digital transformation forces businesses to seek one source of truth and clean up master data. Doing this exercise before implementation or working closely with the selected vendors during the early performance stages is critical to success. Adhering to the following guidelines during the data preparation stage will increase the chances of success:
Make sure you have enough data to enable decision-making.
It should be easy to access and use.
It should contribute to the analytical capabilities needed and provide actionable insights.
It should be consistent across business units.
Supply chain digital transformation is no longer an option; it's necessary and gives businesses a competitive advantage over others. Thanks to the benefits of digital transformation, companies can quickly yield an increased return on investment and continue to work with improved efficiency and enhanced financial metrics.
But there's no one-size-fits-all solution for supply chain digital transformation strategy. It is advisable to seek professional help from digital transformation companies to define specific tech configurations, including software, IoT, AI, and more.
Digital supply chain transformation has emerged as a dividing line between growth and decline. Earlier looked upon as a cost center, the supply chain is now a central pillar to companies' push for competitive advantage and service differentiation. Simultaneously, the past five years have seen a massive leap in digital supply chain technology that promises to simplify the growing complexities of global supply chains, data flows, inventory management, warehousing, and distribution and sourcing logistics.
Companies that provide digital transformation solutions and are embarking on a digital transformation journey for their supply chains will reap the benefits of the growing availability of pre-packaged, customizable technology solutions. These solutions are designed to meet each organization’s unique needs and can be easily configured to fit their specific requirements. By leveraging these solutions, companies can streamline their supply chain operations, improve efficiency, and increase overall performance. The rise of off-the-shelf technology solutions has made it easier for companies to kick-start their digital transformation journey, giving them a head start in the competitive world of digital commerce. Meanwhile, use cases and success stories have increased across industries, highlighting digital transformation's tangible benefits.
Now is the time for enterprises to move the needle on digital transformation strategy or risk spending years struggling to catch up? Yes, the process will be disruptive, the technology will be complex, and the proliferation of services, products, and strategies will be confusing. But as the saying goes, the journey of a thousand miles begins with one step.
A clear digital transformation strategy that ties into your company's growth goals can provide that first step.
Hello, I am Aria!
Would you like to know anything in particular? I am happy to assist you.