AI revolution

Improving inventory productivity and operational agility

Within the functions of supply chain planning, operations and logistics, Companies, who currently using intelligent automation, attribute the highest levels of impact to inventory productivity and operational agility. Both of these areas are critical to growth. 

The goal of supply chain planning is to match supply to demand – delivering products to the right place at the right time to meet customer needs and desires. 

Overstock can result in markdowns and under-stock can mean lost sales. Either scenario has a negative impact on inventory productivity and margin. 

To increase inventory productivity, retailers and brands can harness AI and machine learning algorithms to optimize demand forecasting and supply chain planning. The automation engine can then direct workflow to automatically update and adjust plans, addressing demand spikes and dips due to both unexpected and planned events, such as new product introductions or seasonal shifts. 

Operational agility – the ability within operations to adjust to change quickly and easily – is another area in which intelligent automation can be a game changer. 

Companies are increasingly using IoT and other smart devices to monitor their fleets and warehouse operations, and to track the movement of goods throughout the supply chain.

While intelligent automation provides retailers and brands tremendous potential for transformational growth, executives in our study identified a number of critical factors to realizing its benefits. Key among them are obtaining the right skills, culture, infrastructure and technology.

Many companies have used AI to automate processes, but those that deploy it mainly to displace employees are expected to see only short-term productivity gains, according to a Harvard Business Review report. 

The report found that  the firms that achieve the most significant performance improvements are those that have successfully adopted intelligent automation to work alongside their employees.

Source: Report «The coming AI revolution

in retail and consumer products» by  IBM Institute for Business Value In association with National Retail Federation.

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