Retailers are turning to artificial intelligence (AI) to transform their supply chain management, new research shows.
In a survey of North American retailers, Symphony RetailAI found that most businesses have confidence in their allocation and inventory planning software, but 48% rate their forecasting technology as average to very poor.
One challenge is the lack of connected systems, with 36% of survey respondents reporting that they have separate demand planning, replenishment, allocation and order management systems for store and e-commerce orders.
The pace of innovation is another challenge. More than four in ten (43%) respondents said that their technology can’t keep up with business demands, and cited issues including poor synchronisation between inventory and channels, as well as fulfilment complexities, stocking inefficiencies and high product lead time.
When they do invest in needed technology, retail businesses are most inclined to spend on systems that increase stock availability and decrease stock holding. That’s because retailers often tend to overstock, but then over-correct and understock instead.
Retailers said that AI’s greatest potential to improve supply chain management relates to the quality and speed of generating planning insights. Nearly half of all respondents identified ‘demand management’ as one of the top three areas for AI in the next five years.
“Even though retailers are challenged by the pace of innovation, winners are investing in new technologies, particularly artificial intelligence and machine learning,” commented Patrick Buellet, chief strategy officer at Symphony RetailAI. “These can boost productivity, and greatly improve the accuracy of information for better decisions throughout the supply chain.”
One in three retail professionals surveyed have already incorporated AI capabilities into their supply chain management processes, and one in four is working towards that goal.
According to Symphony RetailAI, the technology 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.
Tags: Artificial Intelligence