One of the sectors that were hit the hardest during the COVID-19 pandemic was logistics and supply chain management. However, technology adoption has eased some of the challenges that the companies in this domain had to face due to lockdowns. In an interview with Dataquest, Balu Chaturvedula, vice president – engineering, supply chain tech, Walmart Global Tech India, spoke about how new-age technologies are transforming the sector.
DQ: What were the top challenges faced by supply chain teams during the COVID-19 pandemic?
Balu Chaturvedula: Walmart employs over 2.2 million associates worldwide. Hence, supply chain plays an important role. The team ensures our customers receive their orders as fast as they want and where they want, in a friction-less, predictable way. They build reusable, scalable, nimble, and flexible technology that powers hundreds of our distribution and fulfillment centers. With end-to-end inventory management, ranging from replenishment and fulfillment to transportation, the team provides our drivers and partners with the tools they need to get the right items, on time, in the right packaging to customers.
Our teams devised ways in reorienting the supply chain to help communities manage how customers shopped during COVID-19. There was also a need to bolster the security of supply networks to make them more resilient to similar situations in the future. Another aspect commonly faced is moving merchandise from a supplier to a store or directly to a customer’s home. Keeping items in stock at local grocery when there’s a lockdown is not productive. During the pandemic, every enterprise has to be dynamic, responsive and predictive to meet customer demands.
DQ: How can the use of AI, Blockchain and other futuristic technologies help in easing these challenges?
Balu Chaturvedula: Supply chain trends in technology are transforming the way business is conducted and they will continue to evolve well into the future. Emerging technologies are making a significant impact on our approach to resolving issues within the supply chain.
Artificial Intelligence (AI) now creates countless opportunities such as predicting demand, managing stock levels, optimizing supply chain, and freeing up time for associates to serve customers. IoT allows the retailers to provide a curated purchase experience, informed service engagements and drive efficiency to transform the retail industry.
For instance, distribution of COVID vaccines opened up very different issues for large supply chains to solve. Vaccine needs to be preserved at -70 degrees before they are distributed in small chunks to locations where vaccination is carried out and administered for a limited number of people. Such scenarios warrant frequent, but intraday planning and optimization such that lowest quantities get transported in the quickest time, while minimizing waste. This poses a new class of just-in-time fulfilment optimization problems that AI can solve for better.
Blockchain is another technology that is improving supply chain efficiency and traceability. For example, distributed hyperledger can be used to create a commonly shared visibility of forecast, demand, inventory levels, and capacity. This will increase sourcing efficiency for suppliers/sellers especially for essentials/consumables, increase network efficiency as well as minimize execution risks and uncertainties. It is also extremely useful in tracking the provenance of products, which provides a complete lineage of items right from the place where the product was sourced or manufactured all the way up to providing this visibility to customers.
Smart contracts can bring in decentralized transaction between parties, where the contract is in a digitally executable format. While ERP systems have been a thing of the past where every decision is centralized, Blockchain technology can help in limited decentralization of decision making and execution, cutting through inefficiency and delays in sharing valuable information.
DQ: What are the trends expected to disrupt the future of the supply chain? How pervasive are these technologies in the sector at present?
Balu Chaturvedula: Supply chain is at the forefront of technology adoption and is greatly benefitting from innovations powered by Blockchain, Cloud computing, AI and Robotics.
As explained earlier, Blockchain enables a customer and seller to directly transact with each other without passing through any form of transaction medium or third-party handler. It significantly enhances supply chain traceability.
Cloud computing is another key technology currently being scaled up across the supply chain. According to industry estimates, over 50% of businesses expect their operations to be in the cloud over the next three years.
In addition to cloud, innovative use of AI across the supply chain lifecycle is poised to greatly benefit organizations in improving efficiency and profitability through better-managed operations. For instance, meeting the ever-changing fulfillment optimization needs, where bio-inspired AI such as Ant Colony Optimization (ACO), Bees Colony Optimization, SWARM intelligence can be used for multi-objective optimization problems like optimal sourcing, lowest cost path planning, minimizing inventory movements, minimizing safety stock, finding the most optimal location for new facilities and so on.
Even immersive technologies like Augmented Reality (AR) and Virtual Reality (VR) have come a long way from their nascent stage to creating a massive impact especially in areas like customer experience. Retailers are using them to fundamentally change the way consumers shop by creating a deeper, more interactive engagement.
Increase in the usage of robotics is another trend to drive efficiency while reducing errors in picking and packing operations. As customers want more and more instant gratification, we’ll see rise in machines performing routine tasks with some level of intelligence at very high speed.
Hence it’s evident that as technology continues to evolve and become more pervasive, it provides opportunities to find new and innovative solutions to challenges previously thought unsolvable.
DQ: How has WGTI pivoted during the pandemic to adapt to evolving supply chain needs?
Balu Chaturvedula: Walmart’s focus is on building and deploying technology to bend the cost curve for the company while ensuring speed, quality, and simplicity. The company has been pioneering new technologies to minimize the time spends on more mundane and repetitive tasks. It ensures that our customers receive their orders as fast as they want and where they want, in a frictionless, predictable way. We build reusable, scalable, nimble, and flexible SaaS-based solutions that power hundreds of our distribution and fulfillment centers.
Over the course of last year, WGTI has adopted several new systems to address supply chain hiccups across business functions. The team has set-up a Global Marketplace Platform, a multi-tenant automated workflow-driven platform which has accelerated the acquisition of sellers as well as a supplier-driven cross-channel to reduce the time taken for item set up and to make headway in the assortment.
Likewise, the fulfilment function at Walmart worked towards increasing store slot capacity and profitable sourcing by rebalancing the network while enhancing digital fulfilment and pre-orders.