Future Retail View: Supply chain to top NRF agenda
Retail Technology speaks to Troy Prothero, SymphonyAI Retail CPG Product Management Senior Vice President, to find out what retail supply chain trends to follow at the upcoming tech trade show
If the pandemic led consumers to embrace digital fully, then the impact has put added pressure on retailers to meet their demand for speed and expectations of convenience.
This shift has placed supply chains at the frontline of the operational challenges faced by retailers and consumer packaged goods (CPG) manufacturers, according to Troy Prothero, Senior Vice President of Product Management for SymphonyAI Retail CPG.
Prothero predicted that, as a result, supply chain trends and technology developments will top the agenda next year, as will be seen at the US National Retail Federation (NRF) 2024 Retail’s Big Show.
“These are perennial trends,” he told RetailTechnology.co.uk. “They are improved demand forecasting, better management of volatility and uncertainty, and the need for greater collaboration.”
Matching supply to demand
Confirming Prothero’s prediction, one of the event’s keynote speakers will be the chief executive of global third-party logistics (3PL) giant FedEx, not a retailer.
The Show will bring some 40,000 attendees, 450 speakers, and 1,000 exhibitors worldwide, including SymphonyAI Retail CPG, to New York City.
Prothero said he was looking forward to the event and the opportunity it provides to highlight how the latest technology developments are responding to the three main supply chain trends.
“There continues to be an appetite for improving overall demand forecasting accuracy as it’s the thing that drives everything else in the supply chain,” he said.
“So, there’s going to be a continued desire to find demand forecasting solutions that give the best possible forecast accuracy with the greatest level of internal efficiency and scalability possible.”
Managing volatility and uncertainty
Managing volatility and uncertainty was the second trend Prothero said SymphonyAI Retail CPG would address at the Show, or “this whole idea of supply chain resilience,” as he put it.
“Being able to adapt to and recover quickly from unanticipated events or supply chain disruptions is essential,” he explained, adding, “there’s no perfect answer for those things”.
However, he observed that this shift towards adaptability creates a desire to move beyond “just-in-time” inventory management. “Retailers want to anticipate potential disruptions by putting plans in place ahead of them so they can continue to operate,” he said.
In response, SymphonyAI Retail CPG’s demand forecasting artificial intelligence (DFAI) product does not rely on statistical modelling or historical sales data. “It is purely AI-driven,” Prothero declared.
“It uses a portfolio of AI models and algorithms to produce the forecast, and it certainly ingests all of that time series sales data,” he added.
Moving beyond historical analysis
Prothero explained that maybe even more importantly, DFAI looks to ingest as much contextual data as possible: “By contextual data, I mean promotional and weather data, special events, and data about products themselves, such as attributes, as well as information about customers and store segments.”
So, in the absence of consistent time series data during disruptions (caused by events such as a pandemic), he said it is possible to construct a future-looking forecast based not only on what sales took place and when but also on what we understand about why they took place.
“This is not the only answer,” according to Prothero. “But, if traditional forecasting methods are no longer producing the results we want, then we have to change our forecasting methods, and we’ve moved from statistics to AI, where we’re seeing amazing results.”
He also said SymphonyAI Retail CPG has integrated the generative AI-based copilot directly into its demand forecasting solution: “What the Gen AI co-pilot supports, in this case, is the efficient and optimal identification of an existing item that the new item can be linked to in order to utilise its sales history for forecast purposes.”
“The goal should be to achieve the same value with less effort or more value with the same effort,” added Prothero, quoting from an article published by venture capital firm Andreessen Horowitz (a16z).
Harnessing the power of collaboration
The supply chain executive characterised the third most significant industry trend as the need for more effective collaboration.
He stated: “Retailers and their trading partners are going to realise that to be successful at dealing with volatility and uncertainty, they’re going to have to collaborate much more closely and effectively than they have done in the past.”
Collaboration is a focus area within the SymphonyAI Retail CPG product suite that Prothero said he and his team are building to launch in 2024.
“It’s a collaborative data analytics platform designed to join retailers and CPG trading partners together and make that collaboration more efficient, based on a single version of the truth,” he revealed.
Master data management efficiency
In seeking more efficient data sharing, Prothero described master data management (MDM) system enhancements that enable data accuracy and how this work underpins supply chain success.
He returned to the example of the value of collaboration between retailer and CPG in ensuring accurate master data when introducing a new item.
“Our MDM is particularly well suited for grocery retailers,” he said. “Where we differentiate is in our ability to define suppliers and commercial and service contracts, for example, in a way that supports the complexity of the CPG and retailer relationship."
Beyond this, Prothero said efficient execution must ensure proper distribution and sales activation of new items across a retail network, which may have thousands of stores.
“The other thing that we do very well from an MDM standpoint is ensuring you have accurate information for ecommerce alongside other sales channels,” he added.
Data flexibility and cloud migration
Another essential MDM requirement for successful supply chain operational execution Prothero emphasised is the difference between sales and logistics units from a product standpoint.
He explained: “We do an excellent job making a clear distinction between the two, allowing a retailer to view items from a sales view, a selling view, and allowing operations or supply chain functions to view them from a logistics and operations standpoint, which is what we call a logistics variant, for instance.”
However, the final development underpinning each trend is technology-driven. “The assumption is always cloud-first delivery now,” Prothero confirmed. “The benefits are greater efficiency and a lower cost base. Features and functionality are more quickly accessed, and there’s no need for UAT [user acceptance testing] and other release processes.”
Addressing the view that AI-driven systems are “black boxes” that are expensive to update and customise, he added that SymphonyAI Retail CPG does not charge for incremental system changes.
“Managed services do the job of updating and managing the models, so they are constantly monitoring and adapting them to provide more value,” he concluded.
Oracle Cloud Infrastructure collaboration
The company also recently announced a collaboration with Oracle to provide a reliable, secure system that can scale with fluctuating needs. Combined with the industry-specific AI-driven insights and recommendations, the collaboration provides resources to remain competitive and forward-looking.
Through Oracle’s alliance with chipmaker NVIDIA, Oracle Cloud Infrastructure (OCI) provides graphics processing unit (GPU) accelerated compute services to support SymphonyAI’s customers’ ability to train AI models to forecast purchasing trends.
In addition, OCI Application Performance Monitoring is designed to provide visibility into the performance of applications and enables development teams to diagnose issues quickly, helping deliver a consistent level of service.
To find out more about SymphonyAI Retail CPG and its presence at the NRF 2024 Retail’s Big Show and to book a booth tour, please visit here.