The head of German AI developers Blue Yonder believes retailers such as Morrisons will need artificial intelligence to cope with their increased hyper-local produce range.
CEO Uwe Weiss, said the 20,000,000 decisions that have to be made by a national groery chain was “far too much for one team of humans”, claiming that AI can factor in supply vairables from weather to football matches.
His comments come after Morrisons said they were looking to increase their “hyper-local” range having already signed 200 deals with local suppliers earlier in the year.
“All of our strawberries in season are British, but if strawberries are being grown in Garforth, where we have a store down the road, we can sell ‘picked today, sold today’ Garforth strawberries and people see this as important,” said Morrisons CEO David Potts.
In response to Potts’ comments, Uwe Weiss said: “It is really interesting to see Morrisons taking this approach to its fresh produce, making the effort to support local suppliers and responding to customer demand for locally sourced produce.
“Retailers looking to shift their supply chains towards local producers need to take into the account the extra burden that this will put upon their replenishment processes.
“This will present a massive logistical challenge to replenishment teams. The average national grocery chain needs to make approximately 20,000,000 replenishment decisions per day, and this will only be further complicated by adding in local suppliers to each store’s supply chain.
“This is far too much data and decision-making to be done by a team of humans, and it is here that artificial intelligence can prove vital. By analysing vast quantities of data, both a retailer’s own data such as sales patterns and customer footfall, and external information such as the weather and events like football matches, AI can predict with much greater accuracy and granularity the customer demand across every product in every store.”
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