Technology is a vital “muscle” for companies to thrive and create value amidst constant disruptions. It bears reflecting on what this means from an engineering standpoint for key industries as we move forward. In 2020, businesses rushed to transform their businesses digitally. With necessary infrastructure in place, it’s now time for businesses to level up and focus on how they can gain ROI from their digital investments. It’s not going to be a fundamental change, rather incremental changes that will enable businesses to gain ground on competition.
Based on my observations in the technology world, I foresee the following four trends impacting various industries:
Digital commerce will become a lot more fun
According to research by eMarketer and Statista, Ecommerce will make up 22 per cent of global retail sales by 2023. It’s a great opportunity for this sector provided they reduce losses due to excess cost of free shipping, order preparation and last-mile delivery.
The biggest cost contributor to any e-commerce P&L is fulfilment. Typically, replenishment models focused on historical sales, preventing retail supply chains from responding with speed when crisis hit. Mastering inventory and forecasting with data and AI can enable retailers to gain back 20 per cent on total cost of order. Newer models can capture a broader set of inputs and use machine learning to sense demand earlier, while enabling creative ways to meet customer needs. Digital IT costs is another area where there is opportunity to gain 30 per cent cost savings. It’s important to review IT operations with a profitability lens and ensure customers gain tangible benefits and higher returns from their investments.
Additionally, using AI and ML will allow retailers to identify items experiencing a high rate of returns and why – for a perspective, it can take up to 30 days before returned products make their way back to inventory. We know that sizing issues are the largest contributor to apparel returns. By cross referencing returned and non-returned items, retailers can make adjustments, such as improving product description, adding a sizing guide or upgrading the imagery.
Optimising and building resilience in supply chains
As we approach 2023, leaders must invest in continuing to make supply chains dynamic, flexible and responsive. Accomplishing this goal will require businesses to drive transformation across the following areas –
•A single sourcing supply chain strategy no longer works: We foresee see a shift where no one wants to risk all their eggs in one basket with a single source model. A multi sourcing strategy will enable businesses to be more dynamic, combat greater complexity and prepare for rapid demand shifts.
•Demand planning and forecasting: Improving accuracy in demand planning, will continue to be a focus moving forward. Be it special days, dynamic pricing, or gaining locational intelligence, data-enabled tools and technologies can provide insights at a granular level to formulate decisions. In fact, one of our clients reduced forecasting processing time from days to hours, by leveraging data through our platform-driven forecasting solutions.
•Multi-channel fulfillment: Ensuring the goods reach their destination has gotten more complicated over time. For a perspective, leading US retailers are now considering setting up warehouses in the east coast in addition to the west coast, to protect themselves against costs of future delays. This is just one instance of how large businesses with global …….