Peak: Use Technology to Meet Demand in a Cost-Efficient Way

Supply chain leaders are continually adapting their strategies to keep pace with an ever-changing world.
Global disruptions arise, consumer behaviour evolves and, just as supply chain managers begin to recalibrate, everything shifts again. The irony, however, is that supply chains lack agility; like steering a massive ship, changing direction takes time.
Core fundamentals like efficient stock holding, maximising service and operating efficiently remain crucial, but rising costs mean businesses can't afford to have capital tied up in overstocked products – or miss out on sales.
Here, Holly Clarke, Product Manager at Peak, suggests how to meet demand in a cost-efficient way.
How difficult is it for supply chain leaders to keep up with the modern-day pace of change?
Supply chain leaders have a difficult job at the best of times, but the pace of change seems to have accelerated significantly over the past decade. With Brexit, international conflicts, a global pandemic and significant environmental and economic disruption, ironically it seems that change is the only constant.
These factors have presented new considerations for many of us, but they’ve had a significant impact on the costs and regulations faced by supply chain teams. Leaders already face internal and external pressures, limiting systems and operations, as well as conflicting KPIs.
Trying to make complex decisions to balance metrics such as cost and service is one thing. Doing this on outdated systems that are no longer fit for purpose is another, especially with the skills shortage seen in many sectors such as construction. Throwing rapid change into the mix doesn’t make things any easier.
But, it’s not all bad. Supply chain leaders can transform the heart of a business, for the benefit of the organisation and the customer. They’re often key members of the organisation with the most experience responding to change, being uniquely placed to have a huge impact.
Is it feasible for leaders to make their supply chains more agile? If so, how?
Words like resilience and agility are often thrown around when we talk about supply chains and, the truth is, they’re both very feasible things to achieve. Plus, organisations don’t need to undertake a huge transformation project to get there. In my experience, the key to positive progress is to take small, meaningful steps led by data.
There are two key levers that leaders can pull to drive agility. The most important one is technology. The only way to consider such complex decision making on a daily basis without hiring 10x team members is by relying on innovative technologies that can help you come to optimal decisions faster. There are a huge number of vendors in the market, but the most important thing to consider is whether it will adapt to your business. This is where AI is your best friend — it can save time, reduce costs and improve service in a flexible way.
The second lever is change management. As we’ve established, change is a challenge. Taking people on a journey is crucial, so investing in technology and taking meaningful steps alongside your team towards being more data-driven, agile and resilient, is far more important than immediately going all-in with an enormous rip-and-replace investment.
How can companies meet demand in a cost-efficient way?
Optimal inventory management holds the key to the balance of cost and service. Too much inventory and you have expensive wastage, lost margin and capital tied up that could be invested elsewhere. Too little inventory and you risk shorting customers and losing revenue. However, getting this balance right is easier said than done.
The foundation for success is an intelligent demand forecast. Not a static model at category level re-run at set intervals, but a granular SKU-level forecast that enables rapid response to changes in demand. Every SKU, location and customer shows unique behaviour. As humans, trying to consider the millions of permutations between these variables is simply impossible. We end up dealing with the most valuable and challenging items, with no time for those in between. This isn’t optimal or sustainable.
However, even an intelligent SKU-level forecast isn’t enough. It’s not just about your forecast accuracy, but actually using it to make optimal decisions. It should be used to set healthy safety stock and inventory levels, ensuring you’re always hitting that perfect balance at the most granular level. This is what AI can enable you to do at scale.
How can firms harness the power of AI to optimise product inventory and pricing?
AI is uniquely placed to optimise inventory and pricing decisions for organisations. It can consider millions of complex data points that humans don’t have the time or resources to consider, making recommendations that save teams hundreds of hours. This time can then be spent on strategic planning and exception management, rather than trying to wrangle data across multiple systems and spreadsheets.
It’s also important to consider that every business is unique. Unique SKUs, customers, systems and data. This means that your AI should be unique, too. It must be flexible and work with your organisation’s processes, constraints and requirements to drive substantial ROI over the short and long term.
Peak enables every business to win, sitting on top of existing ERP systems with its own AI to optimise inventories and pricing. You don’t need a large, in-house tech team. You don’t need to rip out current systems. We simplify AI adoption, removing the barriers and complexity to make great outcomes and rapid results accessible to all.
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