Digital transformation

Smart logistics and supply chain management

June 20, 2023 - 7 minutes reading time
Article by Redactie Insights

To respond adequately to the constantly evolving needs of today’s consumers, more and more retailers are rethinking their approach to logistics and supply chain management by adopting robotics and smart inventory management solutions.

Like many other industries, retail is undergoing a major transformation driven by recent advancements in digital technology, which promises to revolutionise the industry as we know it. Robotics technology, and smart inventory management solutions in particular, play a key role in this ongoing transformation, ushering in a new era in retail characterised by innovation, increased personalisation, and unmatched efficiency. By leveraging these cutting-edge technologies, retailers can completely reinvent their approach to logistics and supply chain management. Among other things, they enable retailers to optimise their inventory levels, predict future trends, and provide customers with a more personalised shopping experience than ever before.

Furthermore, thanks to some major advancements in robotics technology, it’s now possible to automate a wide range of repetitive, time-consuming tasks, such as scanning, sorting, and storing. By letting robots do the heavy lifting, retailers can free up their staff to focus on delivering top-notch customer service, which is essential for survival in an increasingly competitive retail landscape. Machine learning, computer vision, and smart shelf technologies will also have a role to play, enabling retailers to streamline their operations and ensure that their shelves are always stocked with the right products. So, join us as we explore the potential implications of these innovative solutions for retail logistics and supply chain management. We’ll also outline the benefits and challenges the adoption of these innovations is likely to bring, and discuss how retailers can use them to cater to the ever-changing needs of today’s consumers.


New smart inventory management methods

Whether you're just starting out or you've been in the game for a while, you need to know that the success of any business depends on strategic planning and being able to anticipate needs before they arise. This is precisely where demand forecasting comes in, a process that enables retailers to predict future trends and avoid experiencing out-of-stock issues. Without accurate forecasting, you are practically flying blind and can easily be caught off guard by sudden spikes in demand for certain products, which can result in missed opportunities, decreased profits, and unhappy customers. So, if you want your business to thrive instead of merely survive, you need to be able to allocate your resources more effectively.

The Swedish food retailer Axfood recently joined forces with German software firm SAP to develop a new assortment planning solution that would enable it to meet its sustainability goals by limiting unnecessary food wastage. While the retailer did already have an assortment planning solution in place, it was rather slow and lacked the functionality to plan multiple assortments simultaneously. The lack of customer-focused aspects in the decision-making processes was another notable drawback of the existing solution, as was the necessity to get a software upgrade if you wanted to conduct cluster analyses. The new solution managed to address these pain points, enabling planners to display all of the data they need on the same screen. Furthermore, the solution uses artificial intelligence and predictive analytics to conduct real-time simulations and help retailers determine which products to put on the shelves.


Hyper-personalisation is a game-changer


Technological advancements in retail logistics

To keep up with the evolving consumer demands and get ahead of their competition, a growing number of retailers are experimenting with technological innovations. For example, European fashion retailer Peek & Cloppenburg recently partnered with logistics giant DHL to use its new fully-automated robotic fulfilment centre to store and ship merchandise to customers across Germany, Austria, Poland, and the Netherlands. At the heart of the new centre is a 6,000-square-metre robotic picking system called AutoStore, which uses 160 robots to automatically locate, pick, and pack items for each individual order made on the retailer’s website, significantly increasing operational efficiency and reducing throughput times for individual customer orders. “This type of solution enables us to better meet the needs and expectations of our customers”, says Marco Rebohm, managing director of Mode Logistik, a subsidiary of the Peek & Cloppenburg group that handles the retailer’s logistics. “And the higher speed and reliability of the system makes it possible for us to easily handle our steadily growing order volumes”. Besides robots, drones could also have an important role in warehouse management.

And the American AI startup Vimaan has developed a drone-based warehouse management system designed to help warehouse managers improve inventory accuracy and visibility. The system uses a combination of cameras, a sensor suite, and computer vision algorithms to capture a wide range of information about the warehouse environment and derive actionable insights from this data. Among other things, it can read barcodes, determine object dimensions, analyse storage space utilisation, and identify inventory damage and various warehouse safety hazards. This could help retailers decrease inventory wastage, reduce the number of claims and chargebacks, lower reverse logistics costs, and provide significant labour savings. One of the first companies to adopt the system is PFS, an e-commerce order fulfilment provider for some of the world’s leading health & beauty, fashion & apparel, jewellery, and consumer packaged goods brands. By implementing the technology in its warehouses, PFS hopes to significantly increase the accuracy and traceability of client product inventory across its fulfilment centres.

The role of robots

While many technological innovations have found their way into logistics and supply chain management over the years, it’s safe to say that no technology has had as much impact on this aspect of retail operations as robotics. Agility Robotics recently revealed its new robot Digit, which is described as the world’s first commercially available humanoid warehouse robot. Approximately 175 cm tall and weighing 63,5 kg, the robot is designed to work next to humans in warehouses and distribution centres and is capable of lifting plastic bins and carrying them to another location. To improve human-robot interaction, the company equipped Digit with a head and digital face, which allows it to indicate in which direction it’s going. “You don't want to have to train people that this light means that and this sound means this. We have the opportunity of using body language and expression to share intent from the robot”, explains Jonathan Hurst, Chief Technology Officer at Agility Robotics. If everything goes according to plan, the robot will be ready for delivery in 2025.

And the California-based startup Zippedi has taken inventory management one step further by using robots to create a digital twin of the retail environment, enabling shoppers to know what is on shelves at any given time and where the products are located. Of course, robotics technology has many other potential applications in retail that extend beyond inventory management, including last-mile logistics. For instance, the French supermarket chain Carrefour recently started using autonomous robots developed by the Turkish company to deliver groceries to customers in Belgium. After customers place an order through Carrefour’s app, one of the robotic vehicles from the grocer’s fleet will deliver the items to the customer’s home in less than 15 minutes. The pilot will initially be restricted to one complex in Zaventem, but in the future, Carrefour hopes to roll out the programme in other densely populated urban areas and small- and mid-sized towns across Europe as well.


In closing

Digital technology is transforming the retail industry, and smart inventory management solutions and robotics technology are at the forefront of this change. These innovative solutions are enabling retailers to optimise their inventory levels, predict future trends, and provide customers with a more personalised shopping experience than ever before. Additionally, the use of robots is automating repetitive, time-consuming tasks, freeing up staff to focus on delivering top-notch customer service. Technologies like machine learning, computer vision, and smart shelf technologies are also playing a role in streamlining operations and ensuring that shelves are always stocked with the right products. These advancements in technology are creating an era of innovation, increased personalisation, and unmatched efficiency in retail logistics and supply chain management, helping retailers to cater to the ever-changing needs of today's consumers.

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