Transforming Basic Supply Chain to Digital Innovations
Global supply chain executive, Peter Melville, Head of Retail Supply Chains at DB Schenker was the latest to join the CBX Webcast Series. Peter discussed past supply chain practices vs. current innovations such as, sourcing management software, supply chain software, product lifecycle management (retail PLM), artificial intelligence (AI) and blockchain methodologies that help to accelerate products to market ahead of consumer expectations.
It’s clear that retail sourcing software will play an ever-increasing role to the health of retailer’s business, and Peter singled out supply chain visibility and precision as two key components of supply chain management that could help the retail sector compete with the new age retail giants: Amazon and Walmart.
Traditionally, communication and visibility throughout the supply chain has been tracked with emails and spreadsheets, however, as retailers look to scale their private label operations, legacy communication and tracking tools need to evolve. During the latest CBX webcast Peter stated, “gone are the days in which we can handle retail sourcing and supply chain operations with spreadsheet’s and email follow-ups as the data from current supply chain operations has become far too complex”. So, what then, becomes the solution? Retail Supply Chain Management software integrated with PLM system software can offer total visibility of the supply chain from product development and retail sourcing, to critical path management and delivery. Transforming to an all-in-one digital innovative platform will improve data accuracy, reduce cycle times and improve supply chain collaboration all while delivering products to market faster.
Historically, it takes 90 days from a purchase order to delivery, and decisions along a products lifecycle need to made with little insights and or visuals of each stage leaving precision and visibility difficult to achieve. However, according to Peter Melville, “Digital Innovations such as retail PLM combined with in-depth sourcing management tools gives retailers the capability to see all stages of a products lifecycle in one central location, throughout the entire supply chain, giving way to complete and accurate data earlier in the process resulting in faster decision making”.
Digitizing, and compressing product development, retail sourcing and supply chain information is the future as the retail industry looks for ways to reduce cycle times and bring products to market faster. Peter’s example described a company is in Germany, The Otto Group that uses Artificial Intelligence (AI) to forecast demand at a 90% accuracy rate. This lowers holding cost and greatly improves the efficiency of the supply chain flow. Amazon is another example that dramatically changed the markets perception of quick delivery and a more efficient supply chain as today’s consumers expect their products to be shipped within a day. Retailers now compete in a hi-speed game trying to figure out how they can increase private label assortments and improve seed-to-market.