The earlier a retailer integrates AI into its supply chain, the bigger competitive edge it will have over other companies from its sector. Read this article to get to know how exactly you should introduce AI-based solutions into your workflows.
When you integrate AI into your supply chain, you should be able to optimize your business processes, reduce risks, and boost revenue. AI-powered solutions are costly, and it might take you some time to adjust your company’s workflows to them. But in the long run, you’ll get a significant competitive edge over other businesses from your sector. From this article, you’ll get to know how to build a supply chain using AI in retail.
Set Realistic Expectations
You should inform your staff members and stakeholders about the importance of AI-powered solutions before you start integrating new tools into your workflows. You should provide answers to the following questions:
- Which goals can AI technology help you to achieve?
- Which of these goals are short-term, mid-term, and long-term?
- What are the relevant KPIs for each of these goals?
- How do AI-powered solutions differ from the tools that you have already used for a while? ?
- Which solutions are currently available on the market that your business can benefit from?
- Do any of your competitors use AI technology already? If yes, how do they benefit from it?
Besides, you should mention the hypothetical costs of the implementation of AI-powered solutions:
- Technology-acquisition expenses
- Effects of temporary productivity disruption
- Labor costs of installation, setup, and training
You should explain to your stakeholders and staff members that AI-powered solutions won’t generate immediate profit for your business. It may take a few years until your expenses pay back. But once the investment breaks even, it should help you save a lot of money each month.
Assess Your Company’s Readiness to Integrate AI-Powered Solutions
Your staff members might be afraid that AI-powered solutions will leave them jobless. Some human jobs might become redundant indeed. But at the same time, new jobs will open that will be related to managing AI technology. Your HR managers might need to do the following:
- Hire new professionals who have skills and experience to manage AI-powered tools
- Train existing employees and help them to adapt to new workflows and responsibilities
Besides, you should examine your existing tools to understand whether they are compatible with AI technology. Interoperability is crucial. Discuss the advantages and limitations of the solutions that you already use with your relevant stakeholders. If you need to update some tools, explain how to do it in the most efficient and budget-friendly way.
After you purchase the AI-based solutions, you’ll be able to integrate them in the following locations:
- On-site
- In a data warehouse
- In a private, hybrid, or public cloud
You can also distribute your software between these three types of locations and modify user access rights for each of them
Learn to Gather and Systematize Data
Some business leaders might hesitate to integrate AI because of a misconception. They may think that the amount of data they have is not enough for AI-based tools. But your company already collects a lot of information for compliance purposes and audits. All you need to do is to learn to locate, consolidate, and analyze it.
Plus, you should enhance communication and collaboration among your teams. Each of the teams within your company pursues its specific goals. Consequently, each team has its individual perception of which data is important. You may consider setting uniform standards for collecting information in all your departments. The data that human professionals used to classify as “informational noise” will be precious for your AI-powered tools.
Benefits of AI in Supply Chain
Once you integrate AI-based solutions into your supply chain, you should appreciate the following benefits:
- Accurate inventory management. Thanks to its ability to handle huge amounts of data, AI technology will help you to prevent overstocking, inadequate stock, and unexpected stock-outs. The process of picking and packing items will become faster and more efficient. You’ll receive timely and highly accurate guidance on forecasting supply and demand. You’ll be able to predict and discover new consumer habits.
- Warehouse efficiency. By saying “efficiency” we mean the smooth journey of each order to its customer. You’ll be able to reduce the number of jobs for human professionals in your warehouse, which means you won’t need to pay monthly salaries to them. Your workflows will be less prone to errors that take place because of human factors. AI-powered tools can effortlessly cope with tasks and challenges that humans might find difficult. Besides, automation should accelerate your warehouse workflows.
- Enhanced safety. People who work in your warehouses will be less likely to have accidents. The items that you supply will be less prone to damage. AI can analyze workplace safety data and inform your managers about any potential risks. You’ll be able to record stocking parameters and update operations along with necessary feedback loops and proactive maintenance.
- On-time delivery. Your delivery will become faster, safer, and smarter because it won’t be dependent on manual efforts. AI-powered tools will remove operational bottlenecks along the value chain and your customers will receive orders on time.
Besides, it should become easier for you to plan and schedule your activities as well as make informed decisions. You’ll appreciate the end-to-end visibility of your warehouse processes. AI will provide you with actionable insights thanks to its ability to sift through large amounts of scattered information to detect patterns and quantify tradeoffs at scale. It will be easier for you to identify opportunities for improvement and make the most of them.
Final Thoughts
Hopefully, you found this article informative and now you better understand how to build a supply chain using AI in retail. First, you should explain the importance of AI-based solutions to your staff and stakeholders. It would be wise to provide relevant KPIs for all the benefits that you mention. Second, you should assess the technological readiness of your company. Finally, you need to learn to gather and systematize data. The integration of AI technology might require significant expenses, but it will grant you a significant competitive edge in the long run.
