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How AI, robotics are reshaping retail supply chains

The retail industry has seen a major digital transformation. Consumers are now ordering products online and receiving swift deliveries. This seamless shopping experience in fact relies on an efficient supply chain that is powered by technologies such as AI, machine learning and robotics.

How AI, robotics are reshaping retail supply chains

Role of Technology in Retail

Retail technology has advanced significantly. It has greatly enhanced the retail-customer experience. Online shoppers now have easy access to a wide variety of products. These improvements are powered by digital innovation. Retailers can now easily meet the changing needs of customers while navigating economic uncertainties.

Robots and Automation

One of the important advancements is the integration of robots. These robots help warehouse workers handle lots of products effectively. For instance, Amazon has developed robots that streamline the fulfillment process by moving individual products before they are packaged. Despite worries about job impacts, it is believed that technology will improve skills of workers rather than replace them. This means that workers will have the opportunity to diversify their skills, work more efficiently and even evolve with market changes.

Use of AI and Machine Learning

AI and machine learning are reshaping the retail supply chain by accurately predicting product demand, optimizing inventory and automating reorder adjustments. These technologies also enable dynamic pricing in response to market changes. These enhance profitability and competitiveness while preventing overstock.

Influence of Unprecedented Challenges

Lately, the retail supply chain has faced challenges due to the COVID-19 pandemic, Ukraine conflict and rising inflation. The compounding impact of these disruptions alongside labor shortages has significantly complicated the task of logistics providers in managing warehouse activities and timely deliveries. Consequently, there exists a growing urgency for the retail supply chain to adapt and become more flexible. Using robotics and automation is crucial to building strong systems that can handle these tough challenges.

Digital Transformation Success Stories

John Perry, who serves as the managing director at SCALA Consulting, a supply-chain and logistics consultancy, stated that a significant number of companies are allocating resources to adopt robotics and automation technologies. Their aim is to enhance the efficiency and flexibility of their supply chains. As per a SCALA survey, 35% of participants reported investments ranging from $1.2 million to $6 million, with an additional 28% investing even more. Perry highlights that companies that have already integrated these technologies are reaping substantial rewards.

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AI for Efficiency and Sustainability

Naji El-Arifi, the head of innovation at e-commerce consultancy Wunderman Thompson Commerce & Technology, highlights AI’s role in cost reduction and efficiency improvement within supply chains. For example, British furniture retailer DFS uses AI to help its delivery drivers determine the most efficient delivery routes, reducing fuel consumption while making more drop-offs. This is a clear example of how AI can cut costs and enhance efficiency, contributing to more sustainable practices.

Managing Large Inventories

Retailers often struggle to keep track of and manage the many products stored in their warehouses. Overstocking and product wastage can result from inefficient inventory management. Samuel Mueller, the CEO and co-founder of Scandit, a tech company offering smart data capture software, says that using smartphones to gather stockroom data and analyzing it with computer software can assist retailers in addressing these problems. By using this data-driven approach, retailers can optimize their inventory management, reduce waste, and make more informed decisions.

Appealing to Sustainability-Conscious Consumers

In an era where sustainability is a key concern for consumers, retailers are using digital technology to cater to the environmentally conscious market. Many brands now use digital passports that provide information about a product’s lifespan and environmental impact. Consumers can access this data by scanning a QR code on product tags. For retailers, this provides a way to monitor stock levels in the market, enhance their sustainability credentials and compete effectively in the eco-conscious marketplace.

Strategies for Embracing Digital Transformation

Applying digital technology to traditional supply chains may seem challenging for many retailers. However, experts suggest several strategic moves that can ease the transition. Retailers should analyze their supply chain processes, set quantifiable objectives and identify areas that require digitization. By taking a step-by-step approach, retailers can guide the implementation process over several years.

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Employee Training and Engagement

As retailers adopt new technologies, employee training and engagement become essential. Robotics and automation should not be viewed as a threat by employees. Instead, involving employees in the process and building trust can encourage them to embrace and use these systems effectively.

Visibility and Continuous Improvement

Companies need to gain visibility across their supply chains and shopping platforms. Utilizing advanced technology for a comprehensive view and adaptability is vital to keeping supply chains efficient and responsive in the dynamic retail market.