Retailers Plug Into AI
Nearly two-thirds of retail supply chain professionals struggle with disconnects between systems, finds Symphony RetailAI's Strengthening the Retail Supply Chain survey of North American retailers.
The majority of retailers surveyed have confidence in their allocation and inventory planning software, but 48 percent rate their forecasting technology as average to very poor. While they would prefer that each supply chain component work together to enable harmonized demand flow across the organization, few retailers have established a unified process.
The challenge for retailers is that they lack connected systems—36 percent of respondents indicate that they have separate demand planning, replenishment, allocation, and order management systems for store and e-commerce orders. Combined with the fact that 28 percent don't manage each of their modules on the same platform, it's clear that disparate demand replenishment systems significantly burden efficiency.
The pace of innovation is a significant issue, with 43 percent of retail supply chain professionals saying their technology can't keep up with business demands. Forty-two percent describe less-than-optimal synchronization between their inventory and channels, and nearly as many worry about fulfillment complexities, stocking inefficiencies, and high product lead time.
When they do invest in needed technology, organizations are most inclined to spend on systems that increase stock availability and decrease stock holding, and 44 percent of supply chain professionals invest in new technology because their existing systems are unable to sustain new growth.
In an effort to keep reasonable service levels, retailers often tend to overstock, but then over-course correct and understock instead. The impact of this on supply chains is huge. Forty-three percent of respondents say they're challenged by lack of real-time visibility to all supply chain inventory. However, six in 10 professionals say their organization is actively taking steps to address this hurdle and increase inventory visibility.
Artificial intelligence (AI) and machine learning hold enormous potential to improve supply chain efficiency, and forward-looking retailers are already investing in these technologies. Retailers say AI's greatest potential to improve supply chain management relates to quality and speed of planning insights, while nearly half of all respondents identify "demand management" as one of the top three areas for AI in the next five years.
One in three professionals surveyed claim to have incorporated AI capabilities into their supply chain management processes, and one in four is working toward that goal.
SOURCE: Strengthening the Retail Supply Chain survey, RetailAI