Using artificial intelligence to optimise your supply chain ensures that your business leaders spend less time wading through minor decisions and more time thinking about the big picture.
Making vital decisions about the future of your business requires drawing on dynamic, competing and often contradictory sources of information. It's a hugely time-consuming process which can take teams of people to orchestrate, only to start the process all over again the very next month.
Retail supply chain management offers the perfect example of such complexity. Especially as retailers face the growing pressure to handle an ever-greater number of products across more regions, to compete with the likes of Amazon.
Large e-commerce sites can stock anywhere up to 100,000 products. Managing this across multiple regions sees the logistical challenge increase exponentially. At this point, a poorly managed supply chain can completely cripple the business.
This is exactly the kind of challenge on which AI thrives. It's not about taking the decision-making away from your people, it's about using AI to draw insight from vast amounts of data to help your people make smarter decisions more efficiently and effectively.
For retailers, the business benefits from using AI to optimise supply chains are clear.
At Remi AI, we've had customers first come to us with up to 35 per cent lost sales due to stock availability issues. This understandably takes a significant toll on the business. At this point, supply chain management is not simply a technology issue, it is a significant business issue which can't be ignored.
The situation is exacerbated by the fact that customer expectations in terms of stock availability have risen significantly. Retail giants like Amazon have set the bar very high when it comes to ensuring customers can buy what they need, when they need it.
Not having stock at hand doesn't only cost your business lost revenue from that immediate lost sale, as well as the loss of any potential up-selling and cross-selling. Perhaps more significantly, there is also the flow-on effect of lost customer loyalty and brand value. If you don't have what a customer needs the first time, they might not bother coming back.
Of course, the answer to this challenge isn't simply to flood your supply chain with stock. It requires a more nuanced approach.
Holding too much stock binds up vast amounts of capital which could be better invested elsewhere. Perhaps elsewhere in the supply chain, or perhaps on marketing and promotions to drive sales.
When applied to supply chains, AI typically aims to handle between 30 and 60 per cent of decisions, freeing up your people to focus on more value-adding tasks. This doesn't just help optimise your current efforts, it can transform the business by delivering insights and identifying missed opportunities which were hiding in plain sight.
From here, predictive analytics and forecasting algorithms allow you to look to the future. As shown in the picture above, ou can also model scenarios and pose "what if?" questions to help you prepare for the unexpected.
If your people are spending so much time making minor decisions that they can't get things done, it's time to leverage AI to ease the load.
Want to know more about inventory management and replenishment? Head here to find out how AI can help you avoid stock-outs, or here to learn all about the things you need to consider before implementing AI. You can also see our platform in action via our case studies - including how we helped a wholesale distributor reduce stock-outs by 24%.Once you’ve had your fill of content from our blog, why not drop us a line here.