This is the second blog in a series in which we review how the supply chain trends we identified at the start of the year have played out. This week, I’ll be looking at Capitalising on connections.
Technology is now a top priority, and rightly so. Today’s competitive grocery market leaves no room for inefficiencies, and that’s where technology comes into play.
Previously, we’ve identified key technologies that we thought will largely influence the course of supply chain evolution. In 2019, we expected that breakthrough value will be achieved by combining a set of potentially transformational technologies that can help deliver a fully digital supply chain, resulting in an improvement of the way it serves its consumers better.
Who's made progress this year?
Several retailers have invested in technology to link and build their ecosystem this year. One of the enabling technologies is Blockchain, which provides the ability to instantaneously trace the entire lifecycle of food products from origin through every point of contact on their journey to the consumer. French retailer Carrefour, which has been progressively implementing blockchain across a range of food items such as chicken, eggs, raw milk and cheese. As a result, it has reported a sales jump thanks to its use of the technology, which could be explained by the boost in credibility and safety from the consumer’s perspective. Nestlé also began trialling the same technology, in collaboration with external partners, to allow the manufacturer to trace milk all the way from farms in New Zealand to its factories and warehouses in the Middle East.
Meanwhile, Walmart has been testing, across the last few months, robots that can perform a range of ‘disliked’ tasks, from unloading lorries and sorting products to fulfilling online orders and scanning shelves to update product availability and flag any out-of-stocks. According to the retailer, the robots allow its store associates to focus on performing other value-added tasks.
This year has also seen a relative step-up in the use of 5G technology in grocery retail. Ahold Delhaize’s robots, called ‘Marty’, which are being operated in 500 of its stores, are due to be equipped with 5G technology, thanks to a partnership between Badger Technologies, maker of the robots, and US telecom operator AT&T. Using 5G capabilities, data can be shared much faster, which brings the potential to render operations more efficient and consistent.
Drones’ technology, which is still at its infancy, has been recently at the centre of attention of a handful of businesses, particularly Amazon, who’s been carrying out deliveries (on a testing capacity) using drones that are capable of carrying parcels weighing up to 5 pounds and flying a distance of 15 miles in less than 30 minutes, heralding the way for potentially ultra-fast deliveries. Nevertheless, it’s unlikely we’ll witness a widespread use of drones anytime soon given the existence of practical and regulatory hurdles, which I previously highlighted in a blog (Innovation in transport: Navigating to a better destination).
What have we been covering?
We continued to explore how technologies can have a solid impact on the supply chain of the future. In Artificial intelligence in the supply chain: the next step forward in efficiency?, we looked at AI’s (Artificial Intelligence) applications in grocery supply chains, and how it can potentially impose itself as a true game changer, particularly when used in conjunction with other technologies, such as drones, blockchain, sensors within the ‘Internet of Things’ or robots.
Speaking of robots, Robots in retail showcased numerous examples of how they are being deployed and used in retail. That said, many retailers, for various reasons, haven’t embraced yet the use of robots, although we might start seeing more robots in retail as long as the technology behind it continues to evolve, and thus, becomes more affordable.
Walmart’s digitisation strategy looked at how the retailer has created what it calls an ‘in-store ecosystem’, which forms part of its strategy that aims to create the ‘store of the future’. This ecosystem includes three areas: ‘Associate innovations’, ‘Store innovations’ and ‘Customer innovations’. Each one of these areas includes a set of ‘tools’ that can take the shape of a mobile device, an electronic label, a robot or an autonomous vehicle. The main idea of this concept, which is still at its testing phase, is to be able to share data between all these components in order to ramp up efficiency and improve visibility.
As grocers look to meet the ever changing consumer needs, particularly when it comes to the availability of products and the speed of fulfilment of online orders, connecting technologies has the potential not only to simplify the way consumers shop, but also to streamline and simplify grocers’ operations.
2019 has seen more development in the field of grocery technology than ever before and we’re set to witness even more progress next year.