integral part of supply chain decision making . For example , the use of mobility indexes , such as people movement and traffic patterns , regions with rising Covid cases , as well as school openings and closings , were being leveraged by more advanced retailers to understand the shifting channels of delivery based on demand and purchasing patterns . Machine Learning ( ML ) techniques came to the forefront since they are able to incorporate numerous demand drivers in a scalable manner . The same modeling techniques are being used by forward-thinking retailers to better understand how demand is changing in localized micro-markets , and where to place inventory for efficient replenishment .
Digital twin to the rescue : Beyond AI / ML , retailers benefit from other newer technologies like the digital twin , which is essentially a digital representation of the physical supply chain where every asset ( storage , labor , transportation lanes ) can be modeled and therefore analyzed in real time to determine the next best action when exception conditions are detected . With the application of AI / ML techniques on the underlying digital twin , retailers can evaluate trade-offs between demand , sourcing , transportation , service levels , network flow paths and inventory in a holistic fashion .
Continuous planning and execution : This goes without saying , but the recent response
of retailers to the pandemic point to the need for organizational changes that will help them be better prepared for future shocks to the system – either from the demand side or the supply side or both . Retailers should eliminate silos across the lines of business , and build the internal expertise needed to be able to manage the supply chain starting at the outbound docks of the Tier-1 supplier or even at the Tier-2 or Tier-3 level . These organizational changes will better enable retailers to sense demand shifts , develop and implement flexible sourcing strategies and right-size capacity well in advance to align with changing product flows .
A wake-up call for the hardlines industry
While the worldwide Covid-19 pandemic
brought many supply chain challenges that were percolating to a full boil , the shock to the system it created is pointing to a new baseline that will determine tomorrow ’ s retail winners . They need to consider various process and systems changes as they look to drive excellence in their supply chains .
Pandemic outbreaks have been added to the general thinking around supply chain disruptions as the result of ecological and
weather events , labor strikes , geopolitical events , disasters at manufacturing facilities , or fear of pandemics . But the reality is that disruptions can occur on the demand side too – sudden shifts in consumer
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