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Will ‘hyperautomation’ determine retailing success from this point forward?
There is no doubt 2021 is shaping up to be memorable for retailers and consumers alike. It’s not the happy kind of memory either, with once-in-a-lifetime disruptions rippling through supply chains causing costly delays, shortages and capacity problems that highlight a lack of collaboration and visibility among stakeholders.
That’s a big nut to crack that will take both time and a hearty constitution to overcome, so what can be done now to stem the losses?
The success of functions including sales, operations, procurement and shipping depends on retailers’ ability to apply analytics at scale towards developing better insights and responses to consumer demands.
With stress at a fever pitch heading into the holidays, retailers are bolstering nascent last-mile, omnichannel capabilities such as buy online and pickup curbside or in-store, plus more timely delivery options like intra-day. All of these align with front-office, CRM-led investments focused on customer experience.
Some make the mistake of separately pursuing improvements in back-office supply chain functions, like demand planning, procurement, transportation and shipping. Consumers minimally expect that inventory presented online syncs with what’s available in-store. That’s table stakes.
Weaving everything — front to back — together with better automation, analytics and data offers a near-term path with long-term legs. The digital transformations that began last year will require further transformations as course correction becomes a matter of survival.
The term “hyperautomation” may sound fantastical, but its implications promise improvements to supply chains that will come to define successful retail in 2022 and beyond.
Gartner named hyperautomation, which blends machine learning, artificial intelligence (AI) and robotic process automation (RPA) and artificial intelligence (AI), as the top supply chain innovation of 2021.
“The key principle of hyperautomation is that everything that can be automated will be automated,” according to the report.
As you might expect, organizations rushing in to adopt hyperautomation are making mistakes. Gartner says such initiatives “are too often disparate or siloed and are either not aligned to business outcomes or not coordinated with business objectives across functions.”
There are fixes, however, such as aligning supply chain decisions to their impact on the complete consumer experience. Leveraging outside data sources to illuminate blind spots concerning consumer needs and supplier viability is another, as is developing a unified hyperautomation use case roadmap to achieve immediate goals at minimum cost. Ideally unify RPA with AI to address the most urgent needs first to set the stage for scaling value.
Discussion Questions
DISCUSSION QUESTIONS: What do you think was the top supply chain innovation of 2021? What role do you see hyperautomation playing in the retail industry in the short and long-term and what are the keys to getting it right?
Poll
Loading …BrainTrust
“Smarter retailing” requires the use of technology to make smarter and faster decisions. Making decisions in near real-time with enterprise inventory visibility will, or has, become table stakes for retail. In addition, the labor shortages has caused retailers to focus on technology to automate as many tasks as possible.
As the CEO of Levi’s recently said in an interview, “automate everything.” Hyperautomation is a terrific aspiration and retailers (and all businesses for that matter) should be looking for ways to do this in their enterprises — and be continually looking for opportunities to do more. However hyperatuomation, analytics and AI alone won’t get the stranded container ship into port, nor deliver a memorable store experience. Businesses can’t algorithm their way to success, but it’s a powerful approach when applied effectively.
I have a dim view of most companies attempting automation.
“Hyperautomation” is not an urgent priority. Having well-trained staff is urgent. Writing and communicating well-defined processes is urgent. Having processes for continuous improvement that everyone buys into is urgent. If you attempt automation before any of this, you are just looking for a silver bullet.
My view of automation is basically Deming’s. 🙂
“The transformation can only be accomplished by man, not by hardware (computers, gadgets, automation, new machinery). A company can not buy its way into quality.”
Here’s what I can’t believe. It’s an old-fashioned kind of thing. President Biden had to order the Port of Los Angeles to operate 24/7 and he just did? Seriously? And no one thinks that’s crazy? Or that the largest retailers had to charter their own container ships to get past the logjam? Really?
You can have all the automation, linkages, and data you want. If the product is floating around in the water, or sitting on docks waiting to be picked up, it’s all useless.
So while technology is my focus, I remain grounded in reality. I have been singing the same song for months, ever since I discovered the Port of Miami was not operating on Sundays and learned that carriers were making insane profits. The carriers and the ports have to work for their money. Work hard. Simple as that. It really shouldn’t have taken a presidential mandate.
Now, I’m bullish on AI, ML and robotics, of course. That’s great for the future. Our supply chain problems are NOW. And what’s going to fix them is simple – hard work and less greed.
I don’t want to be perceived as a naysayer, but we don’t need a new term like hyperautomation to define implementing improvements on all fronts to streamline the supply chain. I was doing work in that area with American President Lines shipping company in 1991! Adopting and implementing automation has not been and will not be an overnight sensation. It should be a planned, thoughtful process that will integrate many (if not all) parts of the supply chain. Automating all parts will take time. Assigning a new name to a concept is not going to change the concept.
Hyperautomation is much bigger than supply chain – it spans and offers huge potential in merchandising as well. Another factor to think about is that organizations are more likely to apply a specific example of hyperautomation (RPA or AI) discretely to focus on specific areas rather than looking at hyperautomation across the whole organization.
What is key is to be able to identify the “low hanging fruit” – the processes that can be automated fastest while providing the largest benefit.
It’s not new but AI adoption grew this year as omnichannel costs ballooned, forcing retailers and brands to find new efficiencies.
Hyperautomation helps companies maximize productivity with rigorous, data-driven process re-engineering using AI.
Short-term factors include leadership unanimity to weave data across the organization and automate menial tasks.
Longer-term factors include smashing functional and supply chain silos, and embracing more digital processes to streamline operations and boost agility.
Retail is headed toward the fusion of physical and digital; hyperautomation gets companies ready for it.
It seems to me that hyperautomation would be the next evolutionary step for those processes retailers are already doing well and are ready for the next level of efficiency. And I think that’s a really short list. There is no arguing that we will certainly automate lots of processes over time. But there is also no arguing that there are lots of learning curves to deal with along the way.
I’m all-in on automation, but it has to be implemented with an enterprise mindset. Yes a project may start in one business function, say finance, but understanding the ripple effect and its intended/unintended consequences is a must. Many companies like to talk about AI, ML and RPA, but the number of companies that have “hyperautomated” their businesses are fewer than one might think. I know several companies that are still running their businesses on excel spreadsheets. Do these companies have issues? Yes, indeed. Are they still making money? Yes, indeed. Could they deliver greater profits with automation? Yes, indeed. But moving up the automation maturity curve and getting to “hyper” takes time and significant investment.
Useful analytics requires a steady diet of input. The only way to get that is through IoT and RFID. Ideally this needs to start with the manufacturer. With container ship traffic jams offshore and container pileups onshore due to lack of truck drivers and other factors, retailers must find some way to know where their goods are. “Selling the Invisible” was supposed to be a book about services, not retail products.
Regarding the AI piece of hyperautomation — take machine learning, for example — you can’t train models using ML unless you have datasets to feed them. Again, back to that steady diet that should include lots of chips. RFID, that is.
Yes – automation (regardless of “hyper” status) will be critical. Simply put, things are evolving too rapidly to ignore AI and analytics. Whether the issue is supply chains, labor shortages, consumer demand shifts, inflation, evolving competitive landscapes or simple shifts in buying preferences – retailers need to have the tools, processes, strategies and people in place to react to evolving conditions with better outcomes. Automation or hyper-automation can help with this IF it’s built around the right foundational elements, analytics and strategies. People will still absolutely be critical – but instead of manually solving complex problems in traditional ways, they will be designing the automation to make the right choices and to prioritize the right outcomes. The best retailers will be able to evolve and adapt more seamlessly and gain share profitably. The world is moving quicker than ever — retailers need to as well.
Anyone who follows a completely automated approach to retail supply chain operation is in for a very long rocky road and will probably flounder before getting anywhere near achieving it. Like so many great ideas, analysts and consultants get hold of them and try and force them too fast and too far, then they turn round and blame execution followed by a new initiative that will save the retailers that followed the last.
People are, have always been and will always be an integral part of the retail operation. Yes, automation is great, AI is amazing and robotics will undoubtedly improve efficiency but let’s not forget that it takes a human to interpret what is right and what other humans are thinking and doing. Supply chains need to be flexible as well as automated. If not the next pandemic will wipe out a whole lot more. These are all great aids but let’s not get carried away and buy into the hype completely.
The answer varies by sector, the key sales channels uses and merchant size.
As you might expect, it’s frankly easier for smaller retailers to look at hyperautomation since they’re nimbler with less complicated or entrenched processes. Ripping the plumbing out of a house is a lot easier than ripping it out of a condo. There’s also a lot more omnichannel cloud tech for the long-tail than enterprise merchants.
The pandemic has increased the need for everybody to offer unified commerce, but enterprise retail will take years to migrate to truly modern techstack that can ingest data properly to be used in real-time.
As others have rightly pointed out, the supply chain problems are an issue today. That means smaller local retailers will be the first out of the gate to all inventory-to-checkout automation since they have a more localized supply chain. Enterprise retailers will add low-hanging fruit at this point with a plug-n-play mentality from both ends of the spectrum (back office to front of house). If they can buy a store-managed local delivery platform that plugs into their systems as Home Depot has done with Walmart, that will do for now.