Mention automation in the supply chain and for many of us this conjures up an Orwellian vision of a future where humans are subservient to our robotic masters, the sorcerer’s apprentice if you will.
And whilst the reality might be a little less dramatic, there is no doubt that the rapid pace of change is sweeping through all aspects of retail, and in particular, supply chain and logistics.
Alongside their retail cousins visual merchandising and buying, stock replenishment and purchase order management may on the surface, have limited appeal.
However, the truth today is rather different. It’s a fact that inventory management and technology were simply made for each other; just think for a moment of a world where the Internet of Things (IoT) and radio frequency identification (RFID) allow you to know where every piece of stock is at any one time, in real time, without ever having to move from your seat.
If visibility of stock is proving a challenge it might be time to invest in automated inventory management
Total 100% visibility of inventory; the retail holy grail? The good news is that it’s available today.
Automated stock replenishment combined with automated purchase order management creates a powerful, accurate automatic replenishment engine.
Add to that the power of Artificial Intelligence (AI) and machine learning and one can begin to imagine that utopian dream.
As far back as 2014, PwC coined the term ‘Total Retail’ to describe:
“A unified brand story across all channels, that promises a consistently superior customer experience and an integrated back office operating model with agile and innovative technology”
Seems straightforward when seen through the lens four years later however, according to Deloitte in their 2018 Global Chief Procurement Officer survey; “65% of procurement leaders having limited or no visibility beyond their tier 1 suppliers”.
Once seen as very much a back office support operation, inventory management is now at the heart of all retail operations. Automated stock replenishment and purchase order management are now vital to success.
A look at successful online retailers such as Asos, Shop Direct and Boohoo reveal why.
Clear and transparent, rather than opaque visibility of inventory combined with one view of product across the business allows not only for great availability but less stock-outs, mark downs and crucially, the ability to constantly introduce new products. In the case of Asos this equates to 5,000 new items every week.
This last is especially critical for today’s demanding consumer. Here’s why.
It might not have been what Charles Dickens had in mind when he wrote about the orphan Pip in his 13th novel, however it is a fact that our expectations as consumers are now higher than ever before and what’s more they are on a relentless quest for better and better service.
To understand why stock replenishment and purchase order management are so critical to success in today’s retail environment, first we need to understand ourselves – the consumer.
Think of a time when you experienced great retail service – whether it was online, in-store or a combination of both.
Chances are the memory of it will last a long time; in fact, psychologists tell us that the memory of the experience is more powerful than the experience itself.
“We are rapidly entering an age where the brand will be defined not by price or product but by its ability to deliver”
Except that today, as consumers, we have a number of different character traits which, whilst they may have always been there, that latency has now been awakened.
What characterises today’s consumer?
Impatience mixed with high expectation makes for an insatiable appetite for the next best thing, the next best experience. Each time, the bar is being raised and nowhere is this more important than in a retailer’s ability to deliver.
We are rapidly entering an age where the brand will be defined not by price or product but by its ability to deliver.
Automation of inventory management, using AI and machine learning to predict demand and provide visibility of stock wherever it is in the supply chain, will herald a completely new era in retail.
No more one hour delivery slots, we will expect delivery within the hour – wherever we happen to be.
Whether we are on holiday, at a concert, a conference, a sports event – or in urgent need of a key ingredient for that important dinner party – whatever it happens to be, we will expect to be able to order and have it delivered within the hour.
This is already happening.
Founded in 2014, Urb.it are currently in Stockholm, Paris and London; through digitising local retailers and utilising a fleet of couriers known as ‘urbers’ they promise to deliver wherever you are within the hour.
The skies may not about to be filled with drones but enhanced automation in inventory management is driving a new capability which is quenching that insatiable thirst.
The future is happening now; can you afford to be left out?
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Andrew Busby is a former retailer, Founder & CEO of Retail Reflections and an IBM Futurist