Study: AI adoption is on the rise across the supply chain
Retailers are increasingly investing in artificial intelligence (AI) to automate operations and improve supply chain efficiency.
One in three companies claim to have incorporated AI capabilities into their supply chain management processes, and one in four is working toward that goal, according to “Strengthening the Supply Chain,” a study from Symphony RetailAI.
AI is poised 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. Retailers said AI’s greatest potential to improve supply chain management relates to quality and speed of planning insights, while nearly half of all respondents identified “demand management” as one of the top three areas for AI in the next five years.
AI could also help companies automate supply chain operations. This would be an improvement since nearly two-thirds of retail supply chain professionals struggle with disconnects between systems. The majority of surveyed retailers have confidence in their allocation and inventory planning software, but 48% 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 lack of connected systems causes other roadblocks, as well. For example, 36% of respondents indicated that they have separate demand planning, replenishment, allocation and order management systems for store and e-commerce orders. Combined with the fact that 28% don’t manage each of their modules on the same platform, it becomes clear that disparate demand replenishment systems are a significant burden to efficiency.
Retailers feel pressure to push past barriers, and forecast more accurately. However, the pace of innovation is a significant issue, with 43% of retail supply chain professionals saying their technology can’t keep up with business demands. Meanwhile, 42% 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. Meanwhile, 44% of supply chain professionals invest in new technology because their existing systems are unable to sustain new growth.
While retailers strive to keep reasonable service levels, 43% of respondents said they’re challenged by a lack of real-time visibility of all supply chain inventory. However, six in 10 supply chain professionals said their organization is actively taking steps to address this hurdle and increase inventory visibility.
The good news is a new generation of AI solutions can help over-come these challenges.
“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,” said Patrick Buellet, chief strategy officer, Symphony RetailAI.
“Even though retailers are challenged by the pace of innovation, winners are investing in new technologies, particularly artificial intelligence and machine learning,” he added. “These can boost productivity, and greatly improve the accuracy of information for better decisions throughout the supply chain.”
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