Modern technology has changed many aspects of doing business, and supply chain automation has become one of the key areas of focus. IT and AI play an important role in managing logistics processes, reducing costs, and increasing the efficiency of interactions between suppliers, distributors, and customers.
Adam Golovenko, founder of Suplery, a B2B platform for supply chain automation in the beauty industry, explained how innovative implementations can improve business processes.
The Role of Modern Technologies in Supply Chain Automation
In recent decades, market leaders have been actively adopting automated systems for supply chain management to reduce costs and significantly minimize human error’s impact.
The use of artificial intelligence in supply chains allows you to:
– Forecast product demand with high accuracy using machine learning algorithms.
– Automate inventory management, minimizing storage costs and preventing product shortages.
– Optimize logistics processes by intelligently analyzing routes and predicting potential delays.
– Prevent supply disruptions by analyzing risks and offering alternative delivery options.
Many leading international companies have successfully integrated automation and various IT/AI technologies into their supply chains, resulting in significant efficiency gains and cost reductions.
Danone
In 2011, the French food manufacturer implemented a machine learning system to forecast demand more accurately. Working with ToolsGroup, Danone used historical sales and demand data to identify periods of under-supply and improve planning. The result was a 20% increase in forecast accuracy and a 30% reduction in missed sales.
Procter & Gamble
Global consumer goods manufacturer Procter & Gamble is applying automation and data analytics to reduce supply chain costs. A return to pre-COVID activity has ramped production and delivery volumes, making it necessary to cut costs. According to P&G CEO Jon Moeller, this helps the company achieve $200 million to $300 million in savings.
Walmart
Walmart, the largest retailer, uses predictive analytics for supply management. Suppliers to Walmart must use the real-time vendor inventory management system that helps them minimize the inventory for a particular product if there are no significant sales. This allows retailers to save funds to buy products with greater demand and increased probability for greater profits.
Uptake
A U.S. company in Chicago analyzes data using artificial intelligence and machine learning to predict mechanical breakdowns of shipping containers and vehicles, including trucks, cars, rail cars, tractors, and airplanes. This minimizes downtime and improves the efficiency of transportation operations.
Thus, the success of large international companies has already shown that implementing various IT solutions has a positive impact on the delivery process and cost reduction of companies.
Supply Chain Challenges in the Beauty Industry
Despite supply chain automation and optimization advances, the beauty industry has long remained less digitized than other sectors. As Adam Golovenko notes from his own experience, the operational processes of most beauty suppliers and salons still rely heavily on outdated methods of accounting and collaboration, leading to a significant waste of resources.
The main supply chain challenges in the beauty industry today are:
– Manual inventory management leading to over- or under-purchasing.
– High-time costs of placing and processing orders – on average, up to 20-35 hours per week for inventory management in a single salon.
– Lack of demand forecasting, which is why suppliers are often faced with irregular and chaotic orders.
– Low transparency of interaction between suppliers and customers leads to delays and discrepancies in orders.
According to experts’ estimates, the beauty industry’s annual losses from inefficient supply management in the U.S. alone amount to hundreds of millions of dollars. In this situation, process automation is becoming not just a trend, but an urgent necessity.
Suplery Development: Innovative Solutions for Supply Chain Optimization
In 2022, Adam Golovenko, based on his years of experience in IT and business process automation, founded the Suplery project – an innovative platform designed to optimize supply chains in the beauty industry. The platform was designed to eliminate existing inventory and procurement management challenges faced by beauty salons and suppliers.
Key technologies used in Suplery:
Data analysis and demand forecasting
Suplery collects and analyzes historical data on sales, seasonal fluctuations, and current market trends. The platform can predict future product demand using machine learning algorithms, allowing salons and suppliers to make informed purchasing and inventory management decisions.
Real-time tracking
The platform provides transparency throughout the supply chain by enabling users to track real-time order status, stock levels, and delivery dates. This allows you to react quickly to changes and prevent potential supply disruptions.
Intuitive tools and user interface
Suplery is designed with a focus on usability. The intuitive interface allows users to easily manage orders, analyze data, and configure parameters without the need for deep technical knowledge. This reduces barriers to adoption and increases operational efficiency.
Cloud-based solutions
The platform is cloud-based for scalability and accessibility from anywhere in the world. The cloud architecture allows Suplery to integrate with existing management systems and keeps user data secure.
Over the years, the Suplery team has seen some supply chain improvements in the beauty salons it has partnered with:
– Reduced time costs.
By automating inventory and order management processes, beauty salons can save 20 to 35 hours per week, equivalent to a $700 to $750 monthly reduction in operating costs per outlet.
– Optimized inventory.
Salons can maintain optimal inventory levels, avoiding both over- and under-purchasing by accurately forecasting demand.
– Reduced supplier operating costs.
Order processing automation allows suppliers to reduce operating costs by up to 90%, increasing their efficiency and profitability and making their products and services more accessible to customers.
– Strengthening partnerships: direct communication between salons and suppliers without intermediaries facilitates closer collaboration and reduces customer acquisition costs by 50%.
Technologies such as data analytics, real-time tracking, and cloud-based solutions are changing the beauty industry’s approach to supply chain management, making processes more transparent, efficient, and adaptive to market needs, as evidenced by the examples of large companies and the young Suplery platform.
Prospects for Implementing Automation, AI and Other Technologies in Supply Chains: Suplery CEO’s Perspective
According to Adam Golovenko, the future of supply chain management is impossible without deep integration of IT and AI. Modern technologies will allow maximum flexibility in inventory management and optimize logistics processes to the level where deliveries will be fully automated and adapted to market needs in real time.
According to Suplery’s CEO, the key areas of further development of modern technologies in supply chain management are as follows:
– Deep forecasting considers multiple factors, including seasonality, global economic trends, and customer preferences.
– Automated pricing to dynamically adjust prices based on demand and competition.
– Utilization of computer vision and IoT to monitor product balances and merchandise condition in real time.
– Integration of blockchain technology to ensure complete transparency and control of all stages of supply.
Markets&Markets forecasts AI in the supply chain market to grow from $9.15 billion in 2024 to $40.53 billion by 2030, exhibiting a CAGR of 28.2%, which will significantly reduce costs and increase business resilience in crises.
Thus, the development of AI and digital technologies in supply chain management is becoming a competitive advantage and a prerequisite for sustainable business growth. The experience of companies such as Suplery demonstrates that automation allows not only to improve operational efficiency but also to create new business models that can fundamentally change entire industries.