If you're still juggling cumbersome spreadsheets to manage your retail supply chain then you're hurting your entire business. Rather than make do with yesterday's technology, it's time to let artificial intelligence lend a hand.
Many small and medium-sized businesses struggle with the vast number of decisions they face every day. You'll still find companies with upwards of $500 million revenues that are running thousands of daily decisions through Excel rather than finding a smarter way to work.
Remember, each supply chain decision has a monetary value, which means poor decisions destroy value. Replacing Excel with AI underpins better decision-making, which leads to a step change in value creation.
Hollywood paints AI as self-aware machines rising against us but, in real life, AI isn't out to overthrow humanity or steal our jobs. Instead, it's a powerful tool for amplifying human intelligence.
AI tools can free your people from data-crunching in Excel and help them easily turn that data into knowledge and actionable insight. This way they can focus on high-impact decisions and other high-level, value-adding tasks.
When it comes to managing supply chains, AI isn't designed to completely take charge. It can however take on a lot of the burden for making the simple, mundane decisions. When it comes to more complex challenges, AI can surface the data and insight required for people to quickly make informed decisions.
Aligning your AI tools with your KPIs and objectives ensures that it's helping you make the right decisions for your business.
The other key AI use case when it comes to retail supply chains is predictive, because managing supply chains requires anticipating the future. You're trying to predict demand and customer behaviour to ensure you can meet those needs.
Relying on spreadsheet tools such as Excel can produce very poor quality forecasting, resulting in a significant oversupply or undersupply. That can really hurt the business.
We have one client which suspects they're losing around 20 per cent of their revenue to stock-outs, due to the complexity of their supply chain network. At this point they're still making decisions in Excel, which means it's too complex for them to make individual replenishment decisions for each of their locations.
So, what's holding retail businesses back from embracing AI to manage supply chain decision-making? Firstly, they're often so busy struggling with the problem they don't have time to research solutions. They're simply not aware of what AI can do for them.
We've encountered businesses for which updating their supply chain spreadsheet took eight hours. That's assuming Excel didn't crash somewhere along the way. They'd persevered with Excel for so long because that's the way they'd always done things.
Secondly, even if some businesses are aware of AI's potential, they assume these kinds of powerful business tools are only available to the big end of town.
That's simply not the case, today these enterprise-grade tools are within reach of the smallest of businesses and they don't require a dedicated data science team.
When AI is helping you optimise your supply chain and achieve your business goals, all while freeing up your people to be more productive, the return on investment is clear.
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.