The holiday season is fast approaching. As always, supply chains will be vital in realizing the predicted $1.262 trillion in sales that sellers are anticipating for the season.

At the same time, prevailing geopolitical conditions, fuel price increases and labor shortages are all adding up to pose a constant threat. According to Statista, the U.S. faced more than 5,000 supply chain disruptions during the 2021 holiday season, which invariably impacted sales. Supply chain operators will be keen to keep disruptions in check this time around, and have a workaround to ensure uninterrupted and optimized services throughout the period.

Predicting unfavorable events is always a challenge. Still, supply chains can use automation driven by artificial intelligence to bolster efficiencies, become more resilient and meet sales targets for the holiday season. According to McKinsey, AI-powered enablement across the supply chain can improve logistics costs by 15%, inventory levels by 35% and service levels by 65%.

Automating the Backend

Supply chains are complex networks of functions that are predominantly human-driven. Whether it’s the back office generating invoices, orders and receipts, or humans trying to locate products across warehouses, automation delivers higher levels of efficiency. At a time when one-day delivery has become a mandate, agility must be embraced in every facet of supply chain operations.

The first step is integrating systems and employing technology such as robotic process automation (RPA) to handle recurring and mundane tasks. In the process, companies can deliver orders more quickly without the worry of human error. At the next level, intelligent automation, or hyperautomation, integrates internet-of-things sensors, tags, and product verification systems. An automated real-time location system can provide updates about the types of inventories available and their real-time status.

Statistics from last season starkly highlight the gravity of the problem caused by inefficient inventory management. Online users were faced with as many as 2 billion out-of-stock messages while browsing for products online. Automation driven by artificial intelligence, combined with advanced analytics, can lead to significant improvements in inventory management and order tracking, reducing stock discrepancies and improving demand forecasting. Automated systems provide customers with real-time visibility of product moving through the chain. The same capability can be applied to the tracking, tracing and management of reverse logistics, which accounted for 8.75 million returns during the last holiday season.

Collaborative robots, or cobots, are another way to drive agility in operations and prepare for peak-season activities. AI-driven cobots can engage in sorting, loading, unloading and packaging. Gartner predicts that by 2023, cobots will supplement the efforts of more than 30% of operational warehouse workers. 

 Logistics is yet another candidate for modern-day automation, especially through the use of AI and multi-dimensional monitoring. The technology tracks vehicle movements in real-time, while also giving visibility into products on board, and helping logistics providers make real-time decisions about delays and route changes.

Automation at the Front End 

The sheer volume of transactions during the holiday season can be daunting for any supply chain. It’s costly and labor-intensive to rely on human agents to handle large volumes of customers and resolve their issues. An automated digital connection, by contrast, can great enhance the customer experience. AI-powered conversational bots become a means of communicating between retailers and customers, whose requests can be vetted and assigned for action using intelligent automation. Similarly, customers can raise requests for product returns through a mobile app for third-party servicing and reverse logistics partners, and gain visibility of location, arrival time and duration of work for items requiring repairs. The RPA bot can track orders in real time and send notification emails to customers.

Retailers looking to serve buyers during the holiday season require an expansive and connected network. Supply chain networks often must integrate hundreds of global locations, delivering thousands of SKUs to millions of customers. A siloed supply chain in such a scenario would mean a disjointed network with minimal visibility. 

An AI-powered autonomous control tower perfectly aligns with the need of the situation. This is an enhanced version of the traditional control tower which seamlessly integrates multi-party, consumer-driven networks and enables real-time visibility, decision support and autonomous control. It orchestrates companies, people and other resources to provide a global view into the status of each order. And it ensures continuity by issuing notifications of emerging threats and recommending preventive measures. 

While supply chains have evolved to address the challenges of seasonal demand, many are still lagging. AI-driven automation injects certainty into an uncertain world. Networks can optimize every function across the supply chain, delighting customers, and reaping impressive returns for the business.

Amit Gautam is co-founder and chief executive officer of Innover.