Optimizing Back-to-School Supply Chains: How AI and Strong Partnerships Drive Success

Back-to-school shopping, like other large retail events, demands careful supply chain planning to avoid bottlenecks and delays from large orders. With this year's projected spending lower than last year's, retailers need to accurately forecast demand to prevent overstocking while meeting consumers’ needs.

Artificial Intelligence (AI) Optimizes Inventory Purchase Decisions

AI is capable of analyzing consumer purchase histories, browsing patterns and social media activities to identify current and future trends about their preferences and demand fluctuations. These valuable insights can guide sellers in making critical business decisions about what types of products and the optimal quantities to purchase.

Enhanced Fulfillment Planning With AI

Because of the surge in purchase volumes during the back-to-school season, there's an increased need for retailers and their logistics partners to fulfill orders efficiently to keep customers satisfied. During seasons of unusually high volume, preparation tactics should go beyond the traditional supply-and-demand basics. For example, AI can be used to expedite customs clearance processes and track cargo and parcels in real time. Effective analysis of data points like weather conditions, supplier performance and geopolitical events can help predict potential disruptions. Better collaboration with supply chain partners can be fostered with the sharing of real-time data on order statuses, forecasts and inventory levels, helping to meet order volumes more efficiently.

To better manage all possible supply chain disruptions, retailers, suppliers, logistics service providers and customs brokers can leverage AI to model the different scenarios and plan for contingencies to ensure rapid response is possible. AI can also be used to identify the root causes of inefficiencies and delays, empowering users to address underlying issues and streamline operations. Ultimately, AI helps supply chain stakeholders achieve quicker responses to disruptions and maintain efficiency.

Enhancing the Supply Chain by Aligning Stakeholders Through Technology

Technology can enhance transparency and traceability in supplier relationships, facilitating stronger collaborations. Internet of Things (IoT) sensors and blockchain facilitate real-time data sharing among suppliers, retailers and other supply chain partners, ensuring all stakeholders have the same information about inventory levels, shipment statuses and production schedules. Collaborative tools such as shared dashboards and reports can be used to better align their needs and expectations. With this enhanced transparency, all actors can quickly respond to supply chain disruptions and mitigate their impact.

Strong Retailer-Supplier Relationships Keep Supply Chains Running Smoothly

Robust relationships with suppliers can help retailers reduce or avoid bottlenecks and delays. Suppliers are inclined to prioritize orders from, and keep inventory and pricing constant for, partners with whom they enjoy positive relationships. Suppliers would also be more motivated to offer support in times of urgency, such as expedited shipping or providing additional resources. Payment terms can also be more easily negotiated, with greater flexibility in due dates, interest rates and more. Strong supplier-retailer relationships promote open communication and transparency through effective information sharing — e.g., real-time updates on changes that may help the retailer mitigate potential delays.

Emerging Consumer Trends and How They Might Shape Large Shopping Events

There has been a growth in demand for product subscriptions, personalized products and the preference for the buy online, pick up in-store (BOPIS) shopping model. These consumer trends contribute to a more complicated supply chain, and on-time fulfillment becomes a greater challenge. Adding to the high demand and shipment volumes arising from big retail events, this requires efficient and scalable fulfilment solutions that allow greater transparency and integration between various systems and stakeholders. This can be enabled by AI and bolstered by the intentional forging of stronger human-to-human relationships.

Siddharth Priyesh is vice president and head of Americas and Caribbean at CrimsonLogic, part of the PSA Group, is a global technology company driven by innovation to digitalize and simplify global trade.