How retailers can leverage technology to catalyze supply chain performance

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How retailers can leverage technology to catalyze supply chain performance

7 make or break elements of retail supply chain

Managing the catalyst behind world-leading retail supply chains

Retailers now have a wealth of technologies at their disposal that are helping them overcome many critical challenges across the supply chain. Nevertheless, turning this patchwork of technologies into a holistic solution that can be truly leveraged by an organization’s professionals to drive business performance often entails another set of challenges entirely.

Technology solutions are unlocking new levels of agility and operational efficiency in the retail supply chain

Blockchain is increasing traceability, from raw materials through to finished goods PROCUREMENT PLANNING & ORGANIZATION 3D printing or pilot plants are reducing the cost and time to market of new product innovations New systems of waste management allow us to adopt sustainable principles that increase re-use, reduce waste and promote circularity MANUFACTURING Autonomous robots are improving efficiency and reducing operational costs in picking, packing and distributionIoT technology is enabling high levels of visibility at all stages of the distribution process when working with a complex network of global and local partners DISTRIBUTION Artificial intelligence can help organizations predict and react to global shifts in supply caused by climate, trade, e-comm or regulations Data analytics can improve inventory decision-making e.g. regarding the replenishment of millions of SKUs with different consumption dynamics and storage needs Using customer analytics and predictive technologies, retailers are able to maintain customer satisfactionwhen handling stock-outs and substitutionsWith RFID technology, retailers can better track inventory across the estate providing a seamless omnichannel experience for the customer SALES Automated assistants can provide effective 24-7 customer support at a sustainable cost AFTER-SALES
Blockchain is increasing traceability from raw materials through to finished goods PROCUREMENT 3D printing or pilot plants are reducing the cost and time to market of new product innovationsNew systems of waste management allow us to adopt sustainable principles that increase re-use, reduce waste and promote circularity MANUFACTURING Autonomous robots are improving efficiency and reducing operational costs in picking, packing and distributionIoT technology is enabling high levels of visibility at all stages of the distribution process whilst working with a complex network of global and local partners DISTRIBUTION Using customer analytics and predictive technologies, retailers are able to maintain customer satisfaction when handling stock-outs and substitutionsWith RFID technology retailers can better track inventory across the estate providing a seamless omnichannel experience for the customer SALES Automated assistants can provide effective 24-7 customer support at a sustainable cost AFTER-SALES Artificial intelligence can help organizations predict and react to global shifts in supply caused by climate, trade, e-comm or regulations Data Analytics can improve inventory decision-making e.g. in the replenishment of millions of SKUs with different consumption dynamics and storage needs PLANNING & ORGANIZATION [2]

The tyranny of choice

Given the possibilities presented by technology, the direction for retailers should be clear. The pace of innovation in the market can make it difficult to stay abreast. However, executives face pressure to deliver, meaning they must navigate through a complex web of considerations.

WHAT IS THE STARTING POINT AND AMBITION? Are other parts of the organization making investments that will impact the supply chain?Are competitors entering into partnerships that will restrict our opportunities in the future?What is the best way to connect the legacy system with new digital platforms without overloading IT capacity while designing an architecture that will sustain business growth? Internal capability and technical infrastructure Strategic goalsLevels of investment available Each retailer will start from a different place in terms of: WHO CAN DRIVE THE CHANGES REQUIRED? Do we have the internal capability to embed the change necessary? Do we need to buy, build or partner?What is the right balance between insourcing vs. outsourcing throughout my operation to support my business strategy? THE ROUTE AHEAD IS NOT ALWAYS CLEAR With all eyes of the organization looking for clarity and calm, the supply chain area must provide A set of clear principles and a framework against which the leadership can take decisionsA smart investment roadmap which ensures the organization is able to proceed with no regrets
HOW DOES THE INTERNAL OR EXTERNAL CONTEXTAFFECT DECISIONS? WHAT IS THE STARTING POINT AND AMBITION? Are other parts of the organization making investments that will impact the supply chain?Are competitors entering into partnerships that will restrict our opportunities in the future?What is the best way to connect the legacy system with new digital platforms without overloading IT capacity while designing an architecture that will sustain business growth? Internal capability and technical infrastructure Strategic goalsLevels of investment available Each retailer will start from a different place in terms of: WHO CAN DRIVE THE CHANGES REQUIRED? Do we have the internal capability to embed the change necessary? Do we need to buy, build or partner?What is the right balance between insourcing vs. outsourcing throughout my operation to support my business strategy? THE ROUTE AHEAD IS NOT ALWAYS CLEAR With all eyes of the organization looking for clarity and calm, the supply chain area must provide A set of clear principles and a framework against which the leadership can take decisionsA smart investment roadmap which ensures the organization is able to proceed with no regrets

Grounding technology solutions in the retail supply chain

All too often, technology projects become too focused on the technology itself. While we know that technology is a significant enabler in many modern solutions, your project must, first and foremost, remain a retail supply chain project, focused on business problems and carried out in full collaboration with your tech and procurement teams. We see 3 stages as crucial to building lasting technology solutions:

1. FRAMING THE CHALLENGES AND OPPORTUNITIES Define the supply chain scenarios where technology could enable a significant benefit considering both internal and consumer needs. The outcome of this should be consensus regarding a smart investment roadmap providing clarity on where your capabilities need to deliver at either a basic or an enhanced level and what are the “game changers” are that will truly unlock the opportunity available to you. Outline a map of capabilities required to leverage the opportunities definedUnderstand the capacity for the business to absorb, and effectively use, these new capabilities Build a benefits case to show the impact of unmitigated threats and leveraged opportunities considering the capacity to absorb 2. DEVELOPING BUSINESS CAPABILITIES Define which capabilities your business should consider Collaborate with your internal teams to scan for technology and capability according to: Work with your procurement and technology teams to evaluate and select vendors and partners to build the necessary capabilities.The outcome of this will be a team that owns the selection it has made for capability development – one that can continue to define, evaluate and select the right technology providers for your evolving needs. Buying – typically to gain efficiency in common industry challengesBuilding – typically to gain advantage where the outcomes are game changing and enhanced Partnering – typically to gain access to capability or markets at pace A clear business-based framework (developed in Stage 1 above)A set of technology principles (developed together in Stage 2), on the basis of which all current and future decisions should be assessedA prioritized sequence (developed in Stage 1 above) to keep the team focused on making progress, at pace 3. IMPLEMENTATION AND CHANGE MANAGEMENT Create a pragmatic plan to continuously release elements of the business capability: Work backwards from the end-goal to define important outcomes/milestones along a timelineDefine the metrics and KPIs that you should use to track your desired outcomes over timeReduce risk by minimizing big bangs or changes during critical periods for the businessEnsure team members bring both heart and mind to guarantee unity The biggest lesson we’ve learned in these projects is that technology is not the difficult part: Implementing solutions in a way that teams can absorb and adopt, rather than reject or retreat, is the critical success factor.
1. FRAMING THE CHALLENGES AND OPPORTUNITIES Define the supply chain scenarios where technology could enable a significant benefit considering both internal and consumer needs. The outcome of this should be consensus regarding a smart investment roadmap providing clarity on where your capabilities need to deliver at either a basic or an enhanced level and what are the “game changers” are that will truly unlock the opportunity available to you. Outline a map of capabilities required to leverage the opportunities definedUnderstand the capacity for the business to absorb, and effectively use, these new capabilities Build a benefits case to show the impact of unmitigated threats and leveraged opportunities considering the capacity to absorb 2. DEVELOPING BUSINESS CAPABILITIES Define which capabilities your business should consider Collaborate with your internal teams to scan for technology and capability according to: Work with your procurement and technology teams to evaluate and select vendors and partners to build the necessary capabilities.The outcome of this will be a team that owns the selection it has made for capability development – one that can continue to define, evaluate and select the right technology providers for your evolving needs. Buying – typically to gain efficiency in common industry challengesBuilding – typically to gain advantage where the outcomes are game changing and enhanced Partnering – typically to gain access to capability or markets at pace A clear business-based framework (developed in Stage 1 above)A set of technology principles (developed together in Stage 2), on the basis of which all current and future decisions should be assessedA prioritized sequence (developed in Stage 1 above) to keep the team focused on making progress, at pace 3. IMPLEMENTATION AND CHANGE MANAGEMENT Create a pragmatic plan to continuously release elements of the business capability: Work backwards from the end-goal to define important outcomes/milestones along a timelineDefine the metrics and KPIs that you should use to track your desired outcomes over timeReduce risk by minimizing big bangs or changes during critical periods for the businessEnsure team members bring both heart and mind to guarantee unity The biggest lesson we’ve learned in these projects is that technology is not the difficult part: Implementing solutions in a way that teams can absorb and adopt, rather than reject or retreat, is the critical success factor.

Framing the challenges & opportunities

This first stage is often the most important and, at the same time, the most challenging. Working through three simple stages can help create consensus about the path forward.

Challenges out-side-in Capability Roadmap Understand the current supply chain to identify pain points and focus areas for improvement from an internal perspective In parallel, build insight from a customer perspective as to the relative importance of each pain or opportunity Build the investment roadmap that can be delivered within your organization and return the greatest benefit Engage teams throughout the organization to understand the current direction, operational constraints and opportunities Deep dive with data analysis and benchmarking to validate the perceptions Agree and develop scenarios as to where technology will be beneficial and how it will be absorbed Map, research and analyze the customer journey to identify problems and solutions that will have the greatest impact Apply benchmarks with competitors to understand gaps in market norms or areas for differentiation Prioritize the scenarios from Week 1 to provide a deeper focus Define what new capabilities are required for lasting success Define what new skills and ways of working would boost these new capabilities Create a delivery roadmap and outline a business case showing when capabilities will be released and with what business benefit Structured and mapped pain points and opportunities for improvement through technology (from an internal perspective) Customer view on the importance of pain points and opportunities Prioritized view of the scenarios and investments where technology can enhance or change the game An investment roadmap that delivers clarity and consensus over direction, sequencing and timeline. Challenges Inside-out objective activities results 1. 2. 3. 1. 2. 3. 2. 1. 3.

Example framework: Customer journey mapping

CONSUMPTION EXPERIENCE RETURNS PRE- PURCHASE 1. 2. 3. AWARENESS CHANNEL PRODUCT CHOICE SELECTION CONSIDERATION IN STORE RECOMMENDED CURRENT POST- PURCHASE