The traditional supply chain model is being upended, shifting from one designed for relatively standardized products to one that's highly complex and data driven. These shifts demand mass product customization, more accurate supply chain planning, and faster multichannel retail responsiveness that go far beyond the abilities of the typical workforce and infrastructure.
While this may worry some retailers, recent advances in artificial intelligence (AI) and robotics automation provide companies with the ability to proactively respond to these challenges and revolutionize supply chains. In fact, a number of retailers, including Target, Walmart and Lowe’s, have already begun to integrate these technologies into their supply chain strategies.
What’s Behind the Shift?
Much of the integration of AI and robotics automation into supply chains is due to the shift towards the digital economy. Rapidly evolving technology and borderless transactions are changing consumer habits at an unprecedented rate. As such, there's a need for AI-based automation to enter the workplace to deliver against consumer expectations.
By embracing AI and robotics automation, organizations are able to deliver high-quality products, increase manufacturing capabilities, provide better customer service, and enhance their overall supply agility.
AI as the Autopilot
Additionally, the use of AI and robotics automation in the supply chain allows organizations to differentiate themselves from competitors and effectively drive down costs while delivering growth. Perhaps the most useful application of this technology in the supply chain would be to position it as the ”autopilot” of the process, whether it's optimizing planning and fulfillment or using advanced algorithms to monitor and manage inventory levels.
Through AI, organizations can now rapidly aggregate and analyze large masses of data, recognize emerging trends, and use this knowledge to offer the most appropriate customized offerings while informing new products and services aligned to future consumer needs. Robotics then provide the agility to reconfigure the supply chain, from warehouse to shelf, providing opportunities to significantly increase customer satisfaction.
One such use of AI and robotics in the retail supply chain is in-store automation. U.K. supermarket Morrisons is using AI to predict stock availability, while Walmart is testing in-store robots to handle tasks that are repeatable, predictable and manual, like scanning shelves for out-of-stock items, incorrect prices, and wrong or missing labels. Target and Lowe’s also introduced their own robots to monitor inventory and pricing in stores. Other potential uses for retailers include self-driving trucks and delivery carts, real-time shipment tracking, and automated fulfillment.
Building a Better Workplace
It's no secret that the use of AI and robotics in the retail supply chain will impact the workforce, as automation will become more attractive than human labor, especially for repetitive, mundane or dangerous work. However, the use of this technology will ultimately make the workforce stronger. AI and robotics automation requires a highly skilled workforce, creating new job opportunities while unlocking time for more creative and innovative activities. Re-training in automation skills will allow employees to learn new processes and to expand their skill sets beyond what previously existed.
What’s more, workplace efficiency will drastically improve. Machines, through their enhanced data acquisition, AI and geo-location capabilities, will deliver effectively and consistently in their performance. In the new supply chain, collaborative robots work with humans in an enhanced environment, resulting in employee fulfillment, improved focus on value-adding activities and greater workplace morale.
Adopting AI and robotics automation will not happen overnight. As such, it's imperative that retailers develop an enterprisewide, coherent strategy in order to deliver concrete achievements that can scale. To achieve success, retailers should tailor their strategy across all verticals, ensure that it aligns with their existing and future business aspirations, develop an AI-human talent strategy, and implement the strategy in an agile way.
Ruan Jones is a manufacturing automation expert at PA Consulting Group, an innovation and transformation consultancy, and a co-author of PA Consulting’s report on “AI and Robotics Automation in Consumer-Driven Supply Chains," written in partnership with The Consumer Goods Forum.
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