Retail supply chains across the world are ever-evolving, exhibiting some interesting changes as new technologies and industry trends emerge. Coming into 2020, market and industry experts foresee a few trends that would drive the retail supply chain systems in India. Let’s take a closer look:
Automation (Blockchain, AI & Machine Learning)
Technologies such as robotics, machine learning, and AI have disrupted supply chains across industries worldwide and the retail supply chain is no exception. In fact, according to Statista, 49 percent of respondents are expecting the integration of Artificial Intelligence and Machine Learning to reduce costs for retail businesses worldwide.
Today, blockchain has integrated into a number of industries, and retail supply chain management is no exception. It can decentralize processes, improve operational security and prevent leakage or loss of data. It holds the potential to assist in creating an efficient system for recording multiple transactions, tracking assets and enable easy access to document management.
AI and machine learning, on the other hand, not only automate processes but also introduce high degrees of precision in almost all steps of retail supply chain management. Considerable time is saved by speeding the processes up.
Here’s how the integration of such tech can upgrade an ordinary warehouse management system into smart retail warehouse management:
1. Forecasting demand and stock availability
2. Automation of labor-intensive activities: like managing inventory systems using AI systems, autonomous vehicles instead of conventional ground vehicles, and all other tasks that have a high manual dependency.
3. Leveraging the best retail warehouse management software solutions powered by AI, for real-time tracking of warehouse operations and shipping through business intelligence.
There’s more potential for disruption in retail supply chain management:
1.Internal and external costs and expenses can be estimated accurately from the beginning to the end stage of the supply chain.
2.Freight costs can be reduced for third-party logistics businesses, and by extension, their clients
3.Speed, quality and accuracy of deliveries from suppliers
4.Improved planning, both upstream and downstream, from raw material producers to the end consumers
5.Understanding, measuring, and managing risks, by understanding environmental factors.
6.Taking corrective action during unexpected and disruptive events
It is becoming increasingly apparent that maintaining a brick and mortar store, or an online store exclusively is not enough to succeed in the present market conditions. Even giants like Amazon, known for their exclusively online presence, have started testing waters in the form of their convenience store chain, Amazon GO, in the US. Many brands, especially in the apparel and clothing industry, have understood the necessity of maintaining a physical presence, along with their online stores, and enabling convenient experiences to customers.
The challenges lie in ensuring that the retail stores, across various locations, along with the online stores are enabled by the same central supply chain. This would enable consumers to, say, shop and pay for a product through the web application, and pick up the product from the nearest retail stores, saving considerable resources. Hyperlocal deliveries are also possible, provided the supply chain is adequately managed, enabling same-day delivery, an extremely desirable aspect by the end customers.
Reverse Supply Chain
Returns and costs associated with returns still remain to be one of the biggest challenges faced in the industry, despite years of technological advances. That being said, it is essential for any retail supply chain to have an adequate reverse supply chain for enhancing the efficiency and effectiveness of returns. While many argue for improvements in the product and selling strategies, having a successful reverse supply chain strategy is extremely important to minimize the impact of the direct costs arising from the returns.
Sustainable and environment-conscious solutions
As a nation, India is well aware of environmental challenges. So it is imperative that retail supply chains take to more sustainable choices that reduce their carbon footprints.
1. Energy-efficient equipment and lighting – one of the most effective ways of making a warehouse environment-friendly. Other eco-friendly options involve LED lighting, using efficient equipment on a micro level, including GPS chips and even smart tablets.
2. Generating wastage that is not environment-friendly or degradable is a major concern in this space. Organizations may try to contain their waste by switching from traditional packing materials made of synthetic plastics to more biodegradable materials.
On a global level, there are multiple new innovations coming up on a regular basis, including one from LivingPackets, dubbed “the box”, which aims to reduce carbon dioxide emissions, and ultimately reducing the cost of managing supply chains.
Improved deliveries and logistics
In 2020, more warehouse owners and companies are expected to provide delivery-options that can compete with the last-mile delivery services from online retail giants like Amazon and Flipkart. The need for an evolved ecommerce inventory management software system is being felt industry-wide. Some trends to observe:
1. More appropriate warehouse locations
2. Embedded Integration Technologies, like RFID, and real-time location tracking.
3. The emergence of 5PL (5th Party Logistics) partners.
4. Increased efficiency in last mile deliveries
It is becoming increasingly apparent that same-day deliveries will be the trendsetter in India over the next few years. This can be achieved only if last mile deliveries are improved upon.
Decentralization and Automation
The COVID-19 pandemic has forced retail warehouse owners and e-commerce firms to rethink operational strategies at large. They are now opting to build and establish multiple smaller warehouses across locations instead of one large, centrally located warehouse.
Expect an increase in the demand for:
Automation of labor-intensive and mechanical jobs,
Distributed warehouses and therefore,
Retail supply chian management software solutions
This should ensure that the retail supply chain operations never stop completely.
Diversifying Product Portfolios
Modern buying trends have witnessed a sea change and so has customer demand. The millennials today are more digital than ever for everything that they wish to buy. COVID-19 has moved the trend needle even farther. Therefore, it has become extremely essential for retail supply chains to adapt to the change and add/replenish/remove product SKUs overnight from their warehouses to be able to keep up with customer demand and competition, both.
Moving forward in the 2020 decade, enterprises will need to seek the best retail warehouse management software solutions for themselves to stay competitive. Companies that opt for competent retail supply chain management software systems will be in a better position to diversify their product portfolios and adapt to varying demand-trends during times and events like these.