The past two years have been one of the most hectic periods ever in the history of the retail category. From retrofitting stores to promote social distancing, to trying to identify alternate sources to overcome product shortages, the retail world has been in a constant state of flux. Moreover, to cope with this unprecedented amount of pressure, many retailers have been scrambling to find ways to boost their capabilities and efficiency particularly when it comes to how they keep their supply chains moving. Enter AI.
The manufacturing and logistics spaces are notoriously slow-moving when it comes to change. This is true even in spaces such as retail that have historically been technologically agile. For decades, retail shippers have been stuck using outdated technology and tools to help them plan, execute and – most importantly – drive value from their supply chain operations. Thus, while many aspects of the retail experience have become more sophisticated – like expanded digital shopping experiences that lean heavily on mobile or smart speakers – shipping teams continue to struggle with tools like Excel spreadsheets and outdated historical data to make decisions.
However, thanks to innovations in AI technology, retailers are now able to optimize their logistics performance in a similar way to their other operations as well. Here are a few key ways that AI is helping retail shippers boost overall logistics efficiency and build more resilient and forward-thinking shipping infrastructures.
Closing Data Gaps
One of the biggest hurdles that AI helps to overcome is plugging internal data gaps and building bridges between retail shipper logistics departments and the rest of a company’s operations. It is still commonplace today for logistics teams to do batch file transfers of data to and from their business intelligence hubs. Not only does this take a huge amount of time, but by the time the data is exchanged it is often outdated – and if not quickly becomes so. AI helps to break down silos and allow for more real-time data exchange between logistics teams and other organizational decision-makers to make sure that things are moving to plan or that the necessary tweaks are made in a timely manner.
Freight Procurement Optimization
Freight procurement has been a perennial pain point for all shippers. For decades, when sourcing alternate carriers, shippers have had to bear the brunt of relying on the broker market to help facilitate loads that have been rejected by primary carriers. This means resigning themselves to opaque pricing and reporting as well as heightened exposure to reliability and on-time delivery (OTD) issues. However, by using AI, retail shippers can now take back more control of their freight procurement operations. For example, through AI, shippers can get real-time insights into the true market value of a given load, open the load up for bidding to qualified carriers, and secure an alternate carrier in minutes. Meaning, that they can not only get greater cost savings but can significantly bolster their first-hand insights into the way the market is moving.
Boosting Reputation and Customer Loyalty
OTD performance in the best of times can make or break shipper and customer relationships. However, during periods of high uncertainty, making sure that products are delivered when and as expected could be the difference between whether a shipper is operating in the red or the black. AI allows shippers to get real-time updates on truckload progress and delays. Additionally, by sourcing from many more available trucks in real-time, shippers can get a better-suited driver/carrier on a load, allowing shorter deadhead and better OTD. Moreover, it enables shippers to vet carriers based on both historic and more recent performance to ensure that they meet reliability expectations. This helps shippers avoid having their relationships turn sour and also allows them to avoid having to fork over costly rebates for deliveries that do not meet delivery stipulations.
The author, Oleg Yanchyk is Co-Founder & CIO of Sleek Technologies.