By Wayne Snyder, VP Retail Industry EMEA, Blue Yonder
As we come through the immediacy of the COVID crisis, we’re now faced without next urgent challenge: climate change, evidenced by mass flooding and heatwaves globally in recent weeks. The OECD estimates that global supply chain trade makes up 70% of the global economy, and as such, we have a responsibility to turn the supply chain green, and make sustainability a priority in the remainder of 2021 and into 2022.
Beyond it being our fundamental responsibility as global citizens, sustainability is something consumers are increasingly looking for. So, who’s succeeding in turning the supply chain green, and what do other retailers, manufacturers, and logistics providers need to know?:
Looking beyond the horizon with AI
Now more than ever before, forecast planning is proving challenging for many retailers, who have seen consumer behaviour fluctuate widely because of external forces. Technologies like AI can now adjust and optimise operations based not simply on the past but by understanding demand influences to create accurate future forecasts. This will help retailers understand risk and variability so that item-level decisions can be made. And it can generate synergies and efficiencies in-store, through storerooms, through to micro- and macro-warehouses.
We’ve recently worked with Morrisons to leverage an AI-infused planning solution to increase the shelf availability of 29,000 SKUs across 130 categories at its almost 500 stores. The key to putting customers at the heart of every decision is to ensure the products they want to buy in each store are available on the shelf when they shop. This required solving Morrisons’ two biggest challenges, understocking and overstocking, that were caused by manual ordering processes based more on historical practices and intuition than on scientific analysis of local customer behaviors.
Particularly within grocery where the delivery of fresh, good quality items has been imperative for grocers to build trust with consumers, leveraging smart technologies enable retailers and vendors to accurately predict sales is vital for the reduction of food waste.
Making sustainable choices easy for customers
By teaching customers that sustainability can be achieved without disruption to customer experience in-store, we’ll continue to see improvements across key areas such as recycling and waste reduction, which I expect will bleed into the online ecommerce experience too.
The role of brick and mortar has changed, and as we look to more aggressively tackle climate change, it will be imperative that retailers continue the journey to more sustainable practices that don’t disrupt the experience, whether online or in-store. Grocers are taking on the plastic crisis head-on. One supermarket retailer has removed over one billion pieces of plastic from its stores since 2017 and is aiming to hit two billion by the end of 2022. The retailer has also started trialling the elimination of plastic in certain stores. As climate change continues to dominate the news, political, and societal agenda, I expect initiatives like this will become commonplace.
Elevating the last mile
With many consumers continuing to shop from home, speed of delivery remains a critical factor for brand experience and ultimately, customer loyalty. Questions are now being asked about the environmental impact of deliveries, and how waste and excess CO2 emissions can be reduced. A number of third-party logistics providers have taken this challenge to heart and announced their intention to drive a sustainable future with a 100% electric aircraft fleet.
As brands and logistics providers shift towards electric-led deliveries, they’ll be able to keep pace with consumer demand and provide the same level of delivery convenience across the last mile, without adverse impact to the planet.
Ultimately sustainability success for for retailers, manufacturers, and logistics providers will depend on their willingness to take up new ways of operating across the supply chain. And there is no hiding. As sustainability becomes the norm for supply chain providers, I look forward to seeing the innovative ways companies tackle the challenge across retail, manufacturing, and logistics.