Retailers and suppliers face multiple headwinds, but they should be looking at the situation as an opportunity to cut costs and streamline supply chains, says Jason Murray, chief executive officer of Shipium.
The rash of crises to hit supply chains over the past two years would have any company just struggling to survive. But Murray believes the real challenge lies is figuring out how to thrive in that situation — to use those negative events as an opportunity to improve operations and the way in which retailers serve their customers.
Among the first goals is figuring out how to sharpen and maintain pricing. That’s what Amazon.com did during the recession of 2008 — “They used that as an opportunity to change the way they think about things,” Murray says. In the process, Amazon was able to drive additional demand while being perceived as a price leader.
A second key effort for retailers in a crisis is to “lean into automation,” Murray says, particularly data science and optimization techniques for bringing costs under control and becoming as efficient as possible. “So when we get out of this, you want to be in a much more advantageous spot,” he says.
For many people, the word automation conjures up images of machines. But Murray believes the real opportunity in today’s technology lies in applications for improving decision-making on a real-time basis.
Part of that solution includes the use of artificial intelligence and machine learning, which can lead to better forecasts and greater agility to responding to changes in the marketplace and supply chain. With such tools in hand, Murray says, retailers can be better prepared for the next crisis to come along.
“When something changes, whether it’s cost, fuel or [product] availability, your systems need to be able to take all this in and make the optimal decision,” he says. “The only thing that’s going to do that in real time is automation.”
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