How Retail and FMCG Companies are Using Data Analytics for Supply Chain and Logistics During Festive Time

Planning for a spike in demand during this peak season makes or breaks the profitability for many businesses for the upcoming year.
How Retail and FMCG Companies are Using Data Analytics for Supply Chain and Logistics During Festive Time

It is no surprise that festival months are the time of the year when buying activity surpasses all other months. And the buoyancy in customer demand ends up putting retail and FMCG companies in a tough spot. Running out of inventory, shortage of workforce, and storage space, and fleet management are some of the challenges that crop up during the festive season.

Planning for a spike in demand during this peak season makes or breaks the profitability for many businesses for the upcoming year. This year, consumers are preferring online shopping over in-store purchases. Therefore, this festive season brings a new opportunity for companies of all segments, including retail, supply chain, and logistics, to identify customer behavior and the nature of demand.
 
To address this, companies are leveraging the power of data analytics to navigate these challenges and manage the spike in demand during festival months. Backed by Artificial Intelligence and Machine Learning, here’s how data analytics is helping them:

Demand Forecasting: With rapidly changing customer choices during the festive season, the demand for different items inevitably increases. It also becomes challenging for retailers and FMCG companies to predict such a surge in demand. This is where data analytics steps in and plays a crucial role in forecasting demands. Using the information on historical consumption patterns, previous or current trends, etc., retailers can evaluate and take stock of all the necessary variables essential to plan for the upcoming festive season. With proper knowledge of possible spikes, they can instantly stock particular items to address the customers’ demands. Data analytics further becomes useful for retailers and supply chain managers to identify new market opportunities. Simultaneously, using these insights, logistics companies also ramp up their infrastructure and hire an additional workforce in advance to manage the festive rush. 
 
Managing Warehouse: With the rise in demand for products during the festival months, it’s equally important to calculate the additional storage space needed to restock products. With the help of AI-driven location trackers, warehouse managers can chart out floor-by-floor 3D maps of factories about the storage of products and where to accommodate the new consignments. This helps in effective inventory management, thereby helping prevent stock-out or surplus stock. Since data analytics helps warehouse managers in anticipating the optimal inventory levels, they are able to classify the inventory materials based on priority or popularity. Data analytics indeed enables supply chain managers and retailers to improve the efficiency of their sales.

Route Management: Compared to other months, festive months are precisely that time of year when customers expect to receive their products faster. Moreover, with omnichannel shopping becoming the new norm, consumers demand excellent service and high convenience in the delivery of ordered products. This makes it imperative for retail and logistics companies to provide impeccable omnichannel service. Hence, logistics companies are focusing on route management using location intelligence. This helps them determine traffic movement, the best route for last-mile delivery, and sometimes hidden location points. Anticipating the intensity of demands from different locations, they are also able to deploy more staff to the nearest delivery centers to ensure timely delivery of goods in these regions.  
Going Paperless:
Retailers and logistics managers heavily relied on analog processes like data entry for a long time. It poses a challenge during the festival months because the customer demands are fluctuating. Tools backed by AI make this procedure far more convenient. This helps maintain and analyze large data sets while bringing transparency into the entire process and providing a 360-degree ‘factory-to-sale’ visibility. Using data analytics, companies have access to real-time updates, such as the availability of raw materials or workforce distribution across segments.

Conclusion
 
Businesses are already analyzing the increase in demand that festival months are likely to bring. From demand planning to distribution and last-mile logistics, all companies realize the need to evolve and adapt modern practices to provide the best customer service. Hence, they are prioritizing implementing data analytics to enable the movement of large numbers of goods right to the customer’s doorstep, just on time. 
 

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