Retailers have a long way to go for autonomous supply chains, says new report

James is editor in chief of TechForge Media, with a passion for how technologies influence business and several Mobile World Congress events under his belt. James has interviewed a variety of leading figures in his career, from former Mafia boss Michael Franzese, to Steve Wozniak, and Jean Michel Jarre. James can be found tweeting at @James_T_Bourne.

The process of automating the retail supply chain is a slow one according to new research – but the desire for change is strong.

The Retail Supply Chain Digital Readiness report, from Blue Yonder and WMG, University of Warwick, found that of more than 100 global retailers surveyed, only 15% have advanced autonomy in their supply chains.

For those who aren’t there yet – level three and four, representing prescriptive or autonomous supply chains respectively – more than half (61%) of overall respondents said they want to achieve prescriptiveness or autonomy by 2025. More than one in five (22%) of those polled said they were currently using spreadsheets to refresh demand planning processes, with three quarters (74%) looking for automation in this area within five years.

Artificial intelligence (AI) is naturally the primary technology facilitating this change. Three quarters of respondents said they wanted to achieve full omnichannel capability in the next five years, with 41% aiming to use AI for optimum inventory locations. In the same vein, only one in 10 (11%) retailers polled said they used AI for markdown and promotion – a number which is set to rise to 43% in five years’ time.

Jan Godsell, professor of operations and supply chain and strategy at WMG, University of Warwick, noted the disruptive impact of Covid-19 in assessing this change.

“At this time, it’s crucial for retailers to be able to manage multiple factors and complications across their supply chain in real-time,” said Godsell. “At the moment, however, an over-reliance on manual processes means too many retailers are taking time to adapt in line with this unique set of challenges.

“Retailers know they need to get their supply chains digital-ready,” Godsell added. “This will enable them to evolve and make adjustments, both in line with internal factors, such as changing organisational goals, and external ones, such as changing customer desires.”

According to Omdia in April, the expenditure on AI software for retail use across the world will grow to $9.8 billion in 2025, compared to $1.3bn in 2019.

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