Global Benchmark Report: The Case for an AI-Enabled Retail Supply Chain

In the continuous pursuit of supply chain efficiency, retailers have compromised on flexibility and agility. This inability to rapidly respond to disruption has only been further highlighted by the COVID-19 crisis. It has also brought to the fore the value artificial intelligence can deliver to retailers through predictive models that are integral to their decision-making.

To explore this topic, LLamasoft commissioned retail analyst firm RSR Research to conduct a global survey of senior retail executives to understand how well they are able to navigate today’s ‘never normal’ business environment and whether they believe in the promise of a supply chain made smarter by artificial intelligence.

The results are revealing. Below are some highlights but you can download the full report by filling in the form opposite.

Business Challenges

From unexpected supply shortages to changes in consumer demand, survey respondents identified a multitude of supply chain blind spots. The efficacy of their current supply chain systems was of particular concern – when asked how big of a problem they presented in supporting 10 key capabilities, in all instances at least half of the retailers said that it was at least “somewhat of a problem” with many reporting “a big problem.”

Organizational Inhibitors

The survey asked retailers to identify the internal roadblocks that are preventing them from achieving a more effective supply chain. While there was little consensus amongst Retail Winners1 and Others, they were in forceful agreement over one thing – that a focus on efficiency at the expense of flexibility was holding them back.

Opportunities for AI

When asked to identify the potential value of artificial intelligence and machine learning to help address their current challenges, the difference between Retail Winners and others was even more pronounced.

Overperformers tend to want visibility all the way from the point of manufacture through to the point of customer order fulfillment, while under-performers tend to view their supply chain only from the moment when they take possession of the inventory. That’s an important distinction; as the saying goes, “if you can’t see it, you can’t manage it.”

Winners aren’t satisfied with merely coping; they want to manage the end-to-end supply chain – and they want to operationalize the insights that can be had from AI-enabled analyses to help them achieve that objective.

For more detailed findings, insights and recommendations, complete the form to download the full report.

1RSR’s definition of Winners

Assuming industry average comparable store/channel sales growth of 4.5 percent, we define those with sales above this hurdle as “Winners,” those at this sales growth rate as “average,” and those below this sales growth rate as “non-winners”, “laggards” or “also-rans.”

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