Blue Yonder release special Retail Supply Chain Digital Readiness report
Mita Srinivasan
10X Technology

Blue Yonder release special Retail Supply Chain Digital Readiness report

The survey, conducted jointly with University of Warwick, took place in March and April 2020 during the height of the COVID-19 emergency to establish the impacts and learning of the emergency with input from 104 respondents from across the globe

Most global retailers are only at an early stage of digital supply chain adoption, according to a new report from Blue Yonder and University of Warwick. The Retail Supply Chain Digital Readiness report benchmarked the digital supply chain readiness of global retailers, revealing that only 15 percent currently have prescriptive or autonomous supply chains. However, the report also reveals that retailers harbour digital transformation ambitions, with more than half (61 percent) saying they want to achieve a prescriptive or autonomous supply chain by 2025.

The report shows retailers are not able to react to changes in demand in real-time, with only 8 percent refreshing demand planning processes on a real-time basis. More than one fifth (22 percent) of the retailers surveyed currently use spreadsheets for this process, but almost three quarters (74 percent) want to switch to prescriptive or autonomous technology in the next five years.

At present, more than half (61 percent) of retailers manage omni-channel inventory as separate channels. However, three quarters (75 percent) wish to achieve full omni-channel capability in the next five years, with 41 percent aiming to use AI to evaluate optimum inventory locations for each customer transaction. One quarter (25 percent) currently still use spreadsheets to manage replenishment analytics, but retailers know they need a more intelligent approach, with nearly half (46 percent) planning a fully autonomous approach in five years’ time.

The report reveals that when it comes to pricing, the majority of retailers work from a static promotional calendar, with only 13 percent continually optimising prices dynamically. At present, just 11 percent of retailers assessing multiple factors, such as inventory, margin, and waste, for promotions, but nearly half (46 percent) expect to be doing this in five years’ time. Currently just a small number use AI (11 percent) for markdown and promotion; however, in five years’ time they say this will have increased to 43 percent.

Retailers know they need to include key metrics such as stock and margin for financial planning and strategy: only 11 percent currently do this, but 40 percent want to be doing so by 2025. Retailers also want to move financial planning and strategy away from static to real-time approach. Today, only 7 percent have this capability, but 36 percent have set themselves this ambitious objective for the next five years.

. To conduct the survey, the supply chain was broken down into 9 core processes, from which a mission-specific maturity grid was developed for each. Participants were asked to identify their current maturity levels and their ambitions for five years’ time, and from those parameters an overall aggregate score was calculated. This methodology enabled patterns in digital maturity to be identified in correlation with ambition and strategic gap analysis.