Algorithmic Retailing

The Six Aces to Thrive in Supply Chain 4.0

January 24, 2020

The retail supply chain has undergone a paradigm shift in the last couple of years with every part of the operation from planning to order fulfillment time to last mile delivery being impacted with the Business 4.0TM technology pillars—agile, automation, intelligent, and cloud. This radical transformation is empowering retailers today to take on ambitious, bold initiatives such as ‘on the runway–ready’ or explore new possibilities in last mile delivery such as drones.

To conquer modern retail, retailers need more than the traditional winning hand of three aces; they require a Buy one Get One Offer (BOGO) or two sets of three aces as a strategic framework for a successful supply chain:

Algorithmic: Baby steps in adopting artificial intelligence (AI) and machine learning (ML) techniques are now scaling up into firmer steps with deep learning and neural networks blazing trails in replenishment, forecasting, DC labour management, end-to-end supply chain visibility, omnichannel network optimization, and inventory management.

Automated: Reimagination of supply chain processes hinges on two primary factors: 1. What need not be touched, shouldn't be and 2. What needs to be synchronized, should be zero touch. This new paradigm is giving rise to hubotic distribution and fulfillment centers, setting the stage for harmonious co-habitation of man and machines.

Accelerated: With customers expecting fulfillment at the speed of thought, building a strategic last mile friendly network design or optimization of supply chain operations for speed, are a few examples of how global retailers are working on elevating the customer promise.

Anticipatory: While speed is of essence in meeting customer demand, building anticipatory capabilities into the supply chain, especially in areas such as demand sensing and supply chain operational processes are helping close the gaps between expectations of digital customers and the constraints of physical supply chains.

Agile: Customers not only want instant gratification on orders but also expect conveniences such as unprecedented flexibility to return, reschedule, or amend orders; fulfillment modes, and speedy delivery times. Real-time visibility and dynamic optimization through AI is enabling change of mind redressal on demand.

Authentic: While customers are willing to pay a premium for products labelled organic and genuine, their loyalties lie with those retailers who back their claim. Hence, retailers are adopting phygital in supply chains to deliver on the promise of authenticity by facilitating farm-to-table, ramp-to-wardrobe or factory-to-shelf traceability of the product through managed hand-offs across the value chain.

In their pursuit of delivering superlative customer experiences and efficiencies, retailers need to go ‘all in’ with the winning hand of six aces.

Dheeraj Shah is the Head-Supply Chain Management and Product Head-TCS OptuscaiTM, Retail Business Group, TCS

Dheeraj has more than 21 years of experience working with global retailers in Supply Chain strategic initiatives and pioneering the use of disruptive technologies including AI/ML, IOT, Block Chain, Robotics and Automation for generating multi-million dollars business benefits. A thought leader in the Supply Chain space, he has authored and applied for three patents across replenishment, omnichannel demand fulfillment, and distribution center management operations leveraging innovative technologies such as Deep Reinforcement Learning.