Building a Cognitive Supply Chain for Optimum Inventory
The most visible change in the retail industry in recent times has been around enriching customer experiences by facilitating superior and differentiated omni-channel experiences. But to enable this, organizations need to be ably supported by an effective supply chain that is aligned closely with the sales cycles. Apart from optimizing inventory levels, supply chain solutions also need to help mitigate risks, and comply with social, environmental and technical guidelines.
Consumers today are spoilt for choice. Customer preferences and tastes change far more quickly than before, leading to much shorter product lifecycles. This is especially true for segments such as footwear, apparel, and even consumer electronics segments. Inventory freshness has become all important. For mass market trend-driven products, forecasting demand can be extremely challenging. Because industry trends are so dynamic and changing rapidly, relying on historical data to predict sales trends in the near future doesn’t always work.
The old adage of Mass Production, Mass Marketing and Mass Movement is no longer an advantage and in fact an inhibitor for a digital supply chain focused on enabling omni-channel experiences.
Optimizing Inventory Levels
Overstocking creates the need to get rid of excess stock through discounts and markdowns. This severely hits both profitability as well as brand reputation. Understocking again negatively affects sales revenue. It also impacts customer satisfaction, because people are disappointed when they can’t find what they are looking for, in stores. The challenge for retailers is to not only ensure the right level of stock, but also to confirm consistent quality and pricing across stores and direct channels.
The traditional approach to supply chain management is focused on efficiency and minimizing costs. However, the focus now needs to shift towards supply chain flexibility in order to cater to changing customer demands.
The answer lies in leveraging a cognitive supply chain solution that uses technology such as data analytics and machine learning to help optimize the supply chain. Cognitive insight can also help in supply chain areas such as size optimization, profiling and pack optimization. It can relook at traditional algorithms and infuse the spirit of machine learning algorithms.
A Digital Cockpit for an Efficient Supply Chain
Having end to end visibility of the retail organization to understand the operations at a glance is an extremely important component of running an efficient supply chain. The view should ideally be customized to serve people in different roles within the organization. There can be dashboards that give a breakdown of key parameters at the store level, region level and category/product level. All this can run on AI concepts of machine learning, chatbots and voice interactions.
A real-time AI enabled dashboard can also help in better campaign management since it helps measure the campaign impact instantly, leading to better inventory management.