The Intersection of the Supply Chain, Technology and a Merry Shopping Season
Last year, the retail industry had its most lucrative holiday shopping season in years, and 2018 is expected to beat that record. According to the National Retail Federation (NRF), holiday retail sales in November and December are expected to increase between 4.3 and 4.8 percent over 2017 for a total of $717.45 billion to $720.89 billion.
To capitalize, retailers must overcome countless supply chain-related challenges, many of which directly affect customer experience. Retailers must meet the incredibly high customer expectations set by the on-demand industry from retailers like Amazon.com and Walmart, as well as a fear of failure resulting in closures to traditional brick-and-mortar businesses like Sears and Kmart.
Complexity in the retail industry has evolved to unprecedented levels, leaving some of our most beloved retail institutions in ruins. While there's a myriad of reasons for their demise, a breakdown in the supply chain is at the crux of many retail failures.
An example includes one of the most talked about trends in the supply chain industry: the severe driver shortage. Various factors are to blame for this major problem, but at the helm are stringent regulatory changes imposed on the trucking industry in an attempt to increase driver safety. They include a law that limits the number of hours drivers can stay on the road, directly impacting capacity, driver independence and compensation. Finally, turnover in the trucking industry stemming from job dissatisfaction is at an all-time high, with an estimated driver shortage of 60,000 and forecasts of a number 3 times that size by 2026.
Net/net: There's a shortage of trucks to get holiday goods from point A to point B. The problem is real, but consumers wanting to spend money are not interested in the logistical issues preventing them from getting what they want, when they want it. How can retailers compete?
Supply Chain Management and Technology
Retailers must adopt technology into their current operating strategies to compete. Embracing artificial intelligence (AI), machine learning and the Internet of Things (IoT) for planning is no longer optional. Regardless of product, logistics issues within the supply chain are relatively analogous among retailers.
Case in point: solving the truck driver shortage with supply chain technology.
Keeping truck drivers happy is crucial, as they ultimately make the decisions to take your loads over others. So, how can supply chain technology keep them happy?
Telematics plays a critical role if enabled, as truck drivers can immediately go from servicing a few trucking companies to hundreds. Additionally, using mobile apps lets truck drivers easily navigate to the closest rest points and reschedule late arrivals with voice on a robotic process automation (RPA) platform. Particularly during the holidays, having direct access to a broad network of truckers also is imperative to be able to keep up with increased seasonal demand. Finally, automatic and timely proof of delivery (POD) is a must have when transactions peak during the holiday season.
Predictive analytics has become more and more useful to address common issues in the freight industry. Managing capacity problems stemming from mandated regulations is simplified with data, enabling a more accurate assessment of contributing factors to future performance, such as weather, job type, driver availability and day of the week. This information powers schedule optimization, the tracking of shipments, routing and job prioritization. The end result is greater efficiency, which can have a positive impact on the various challenges and provide relief for industries whose businesses rely on a smooth supply chain, even when facing challenges like weather or lack of drivers.
For every problem, there's a solution, even if it’s not immediately evident. Smart supply chain management technology enables retailers and freight companies to be more agile by connecting trading partners with truck drivers and other carriers, and optimizing return trips. Technology can also help retailers track their deliveries with real-time shipment visibility that tracks the elusive first- and last-mile pickups, delivery milestones, shipment status, location, and verified POD across all modes.
Solving Supply Chain Situations
Automation has transformed most business processes, including the retail supply chain. Yet, amazingly, not all retailers or supply chain providers are on board. Where once it was enough to track business activity using pen and paper, this economy demands that every part of the retail supply chain, not just the more complex transactions, is automated.
There are countless logistics inherent in the retail supply chain. Automation is a lifesaver for retailers looking to simplify details like contract management by offering a repository of information that stores and automatically populates details such as contract-based rates. Automated processes lend to creating auditable records, eliminating manual communication and streamlining the payment process.
No matter the challenge being addressed, the bottom line is a successful selling season. This is only possible by delivering the best possible experience for customers, and late shipments leading to empty shelves will hinder this. Retailers can reduce complexity and the instinctual processes that are inherent to traditional decision making with technology that can process a wealth of data to make smarter decisions, leaving little room for error.
So, this holiday season, don’t just wish for automation. Invest in the technology to make it happen.
Pervinder Johar is the CEO of Blume Global, a provider of supply chain solutions to deliver products and services more efficiently for assets, visibility, finance, optimization and logistics.
Related story: Study: AI’s Application for a Strong Supply Chain