CeMAT Insider

Balancing logistics automation and personalisation

Posted by CeMAT Team on 15-Apr-2016 10:46:08

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It’s easy to forget about the human touch when you’re digitising your supply chain management strategy. The efficiencies and optimisation of processes that arise when digitising can make it very tempting to get automation happy.

In 2017, brick and mortar stores are set to represent 72% of retail revenue, with e-commerce representing 18% of revenue, and mobile making up 6% of revenue. So for those businesses who run on an omni-channel or multi-channel model, it will be important to maintain a balance between automating your operations and delivering great customer service in-store.

Leading companies who have invested in their supply chain capabilities through automation generally disrupt the sector by being able to satisfy their customers with fast and cheaper delivery options. These companies have also refined the customer expectation of service delivery, and to remain competitive, McKinsey recommends continually innovating and working on your supply chain at the CEO level to ensure all business processes constantly improve. 

So why is it so important to consider this balance before you cut down on staff and fully automate your processes? The answer: the advent of the associate-less store.

Although this idea describes the most extreme cases, it’s easy to see that customer service can easily be put to the way-side while trying to seek-out cost saving measures and efficiencies, but it’s a question all businesses need to ask as they integrate AI into their business processes and introduce more and more automation technologies into their supply chain.

According to Gartner, the near future will include some in-store labour tasks being replaced by automation, we’ve seen this in supermarket giants like Coles and Woolworths and their self-service checkouts. But the worst thing to happen for a business is to cut down on staff, rendering them unable to provide a great customer experience (you can see how cutting down on staff has impacted Myers here and here). 

The key to success? Being able to suucessfully implement a logistics automation strategy while also maintaining personalisation for your customers. Below we’ve outlined a few ways to get you started.

 

Training the workforce of the future

It’s inevitable, smart-technologies will be creeping into all aspects of business, so figuring out how to get humans and machines to work together will be the key to success here.

The right training to help humans to gain the skills to complement smart technologies would be the ideal blend with it comes to the workforce of the future.

If you have a fully automated supply chain, you could put more human resources into product training to ensure you can deliver a great customer experience in your brick and mortar stores.

This is the strategy David Jones implemented in their department stores when they started to experience slowing sales. They developed new staffing models to free sales managers up from spending so much time on administrative duties so they could spend more time on the floor providing great service.

Alternatively, you could invest the money saved through automation in making your technology more approachable to a broader set of employees. Some businesses are providing online courses to ensure their staff know how to use the machinery.

Another way to improve interactions between machines and humans in the workforce of the future would be to train robots to observe and adapt to the habits of an individual worker. This way the robot can mimic those behaviours, and your workforce can work on other tasks to improve the customer experience.

Many businesses in the future will need to establish what jobs will be assigned to AI and smart technologies, and what jobs will remain in the human realm.

The below diagram gives a good breakdown of how to apply smart machines to customer basics, but as more and more business and IT leaders are facing a shift from labour-driven and technology-enabled paradigms to digitally-driven and human-enabled models, it will be important to establish a balance between human and machine.

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The evolving philosophy of brick and mortar stores

Traditionally, the role of a brick and mortar store was to move product out the door, but the changing nature of the customer has proven this to be inefficient with trying to satisfy customers. 

e-Commerce providers and online reviews have placed hurdles in front of the traditional sales process, while also placing much of the buying power into the hands of the consumer. They don't receive great service in your store? Why not go online? You can't offer them speedy delivery? Why not order it from somewhere else? 

It's a bit of a catch-22,  but the purpose of the physical store today is to deliver experiences in the hope that your customers increase loyalty. If you can create great customer experiences, rather than just trying to move product, your customers will have a positive memory of your brand, and hopefully they buy from your business online or even in the store once they have completed their research.

Providing this kind of service also means that your product needs to be accessible online and in-store, and understanding your customer journey through the buying process will be an important step in getting this balance right.

  

Changes to expect for workforces of the future 

So we know that change is inevitable, and the automated supply chain hasn’t yet rendered the retail store completely redundant. So here are a few changes you can expect:

  • The size of your stores may need to be downsized
  • You might not need to expand your physical stores on a large scale
  • Your stores will be all about ‘creating moments’ for customers
  • Your staff will need to be animated rather than bored
  • You might need to get used to customers coming in to your physical store, and buying online
  • You will need to provide fast delivery times for your online customers and great service for face-to-face sales

 

Topics: Logistics, Supply Chain Management