A recent global study conducted by RELEX Solutions, a unified supply chain and retail planning solutions provider, saw that artificial intelligence (AI) adoption ranked fifth in terms of overall technology spend importance among retailers and Consumer Packaged Goods (CPG) companies.
According to RELEX, the findings suggest a potential underestimation of AI’s role in addressing consumer demand volatility.
“The retail and CPG industries continue to face complex, global challenges that require actionable insights to accurately predict, anticipate, and manage consumer demand,” said Laurence Brenig-Jones, VP of Strategy and Marketing, RELEX Solutions. “
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Titled the “RELEX State of Supply Chain 2024: Retail and CPG Dynamics” report, the study highlights several key insights into industry challenges, strategic investment areas, and upcoming opportunities. Among the concerns identified were rapidly shifting consumer demand volatility, global events and disruptions, and inaccuracies in predicting customer-specific demand.
Integrated supply chain
Retailers are adapting supply chains to meet evolving consumer expectations and channel shifts. Key capabilities identified include real-time inventory visibility, customer demand sensing, and inventory optimization tools. Also, 59% of respondents are expanding omnichannel options to cater to changing consumer delivery preferences.
For CPGs, integrated supply chain planning is crucial. However, legacy constraints and organizational silos present challenges. Key findings include prioritization of day-level planning for accurate forecasting, issues due to disconnected planning across teams and regions, and supply variability impacting the ability to meet order expectations.
“To thrive in this new reality, companies must fundamentally transform their approach to supply chain management by breaking down silos, embracing new technologies like AI and ML, and fostering a culture of collaboration and agility,” Brenig-Jones said.
To navigate macro-economic factors like inflation, CPGs are adjusting inventory and production strategies by monitoring demand signals and implementing safety stock measures.
RELEX emphasized that with the right strategies and tools, companies can unlock new growth opportunities and enhance profitability in the evolving market environment.