How AI Can Help CPG Companies to Improve the Rising Pressure on Order Delivery Performance?

January 13, 2022by Marktine Technology

When products are not in stock, this creates customer dissatisfaction. Many CPG brands are already using AI to improve their supply chain network for on-shelf availability. Retailers can use Artificial Intelligence (AI) solutions to create a personalized shopping experience, leveraging consumer data and on-shelf availability information.In its effort to optimize the supply chains, CPG industry is adopting the more rigorous “on-time in-full” (OTIF) delivery metric.

 

What is OTIF?

OTIF generally refers to a supplier’s ability to deliver product within prescribed delivery windows and at full quantities ordered. Retailers use OTIF as a key performance indicator for supplier evaluation, as well as for internal strategic planning. Manufacturers, particularly those with complex supply chains, use the metric to review the delivery performance of their customers.

 

How AI can offer a solution?

As a result, CPG companies are now shifting towards forecasting products for their own store and reaching out to customers directly. By implementing AI, these CPG companies will have a better understanding of their end-consumer demand and product inventory status at the Distribution Centres.

 

Here are some ways AI can help:

  • Understanding buyer behaviour:
    When consumers are faced with limited time and high levels of stress because of complicated purchasing decisions, marketers can take control by utilizing AI to capture, analyse and engage with target buyers.AI solutions can respond in real-time by optimizing digital campaigns, determining which offers and products will resonate with specific segments on a multi-channel basis.
  • Inventory management:
    AI is a key element of modern day inventory management. Companies can make use of AI to build complex predictive systems that manage their stock better. By using artificial intelligence across all areas of inventory management, companies can optimize their supply chain processes and achieve better demand prediction performance, quality, service and cost savings.
  • Improved customer experience:
    Artificial intelligence is changing the way consumers interact with their favourite brands. As consumer expectations increase and the pressure on order delivery performance rises, customers are looking for brands who can provide exceptional customer service.
  • Avoiding logistic delays:
    Meeting delivery deadlines is critical for CPGs. Supply chain disruptions, especially those caused by transportation delays, can significantly affect the smooth running of a CPG company’s supply chain while driving down customer satisfaction and loyalty toward the brand. Organizations are turning to Machine Learning technologies to gain insights from historical incidents and drivers to predict the probability of delay.
  • Better productivity:
    AI adds the intelligence and cognitive capabilities necessary to the process, enabling speed and accuracy in an otherwise repetitive process. With Robotic process automation (RPA), an AI-based approach, companies can automate manual processes such as data entry, forms processing and document assembly and other existing operational processes, limiting the need for reengineering or overhauling legacy systems.

 

Conclusion:

Major changes in the COVID environment have made it immensely challenging for organizations to offer high-end services. In this environment of uncertainty, AI and advanced analytics can help supply chain professionals strategically plan to overcome these challenges.