Blockchain and AI in UK Retail Supply Chain Management Case Study

Blockchain and AI in UK Retail Supply Chain Management

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Introduction: Blockchain & AI: Transforming UK Retail Supply Chains

The supply chain department of the retail sector in the UK is facing various issues after the pandemic of COVID-19 due to various political and economic factors. In this case, various delays in the supply of the products such as groceries or consumer goods to the end consumers or the distributors in the marketplace have been noted through the Brexit laws and the improper storage of the products (Retail Think Tank, 2016). This further reduced the brand images and the customer attraction for the companies, which has also reduced their sustainability over the time period. Apart from this, one of the most crucial issues faced by the supply chain managers includes the complex nature of the workplace through which the team members are unable to cooperate or coordinate with each other, which further reduces their dedication towards the tasks, and they are unable to meet the expectations of the companies as well as the customers.

Apart from this, the companies like Tesco, and H&M within the retail industry of the UK are also facing issues regarding labour shortages through which they are unable to perform efficiently or maintain the desired productivity. The unavailability of the qualified personnel in the supply chain management can also create misunderstanding in the workplace through which the issues of conflicts can be generated. In association with this, the supply chain team is unable to address the changes in the marketplace and further adapt to the innovation strategy, which also contributes to a reduction in the creativity of the employees (Lans, 2019). However, the cost of the raw materials has also been increased in the UK due to the economic constraints through which the supply chain managers are unable to maintain the desired operations cost designed by the company. This further decreases the profit margin of the companies and generates the risks of a poor rate of return on the investment. Lastly, the supply chain managers are also unable to maintain proper relationships with the partners in the marketplace of the UK retail sector through which they are unable to maintain high standards of operations in the workplace (Lans, 2019). The study, in this case, shows the applications of the blockchain and artificial intelligence (AI) in the supply chain team of the retail organization operating in the UL through which they are able to work efficiently and adapt to the changing environment without any issues of misconduct or improper waste management.

Literature review

Benefits of blockchain in the supply chain department

As noted from the study by Ani (2021), the supply chain is basically a complex network of activities because it consists of the employees who handle the demand of the distributors, customers, retailers and wholesalers at the same time. With the constant growth in the retail industry, the supplies in the marketing environment of the business sectors are reducing, through which the companies are unable to maintain proper supply chain lifecycle. Blockchain, in this case, helps the suppliers to enhance their performance as it records every transaction and distribution of the goods manufactured by the retail companies with the help of the ledger technology. The multiple use of computers in association with this also helps to manage the warehouse activities, such as the storage of raw materials and finished products efficiently through which the issues of waste management are reduced for an extended period (Ani, 2021). Apartfrom this, blockchain also helps the suppliers associated with retail companies like Amazon and Tesco to stay compliant with the international regulation through which they are able to maintain appropriate trade practices, which further reduces the complexity of the operations. Most of the companies, in this case, have received the advantage of gaining real-time information about the changing demands of the customers through which they are able to achieve long-term sustainability in the competitive world.

Apart from this, blockchain also helps to transform the overall structure of the supply chain department because the highly advanced technologies, such as the implementation of Skype, improve communication among the team members through which they are able to stay connected in the workplace as per the study of Higgins, (2022). The proper presence of transparency among the diverse workforce, in this case, also helps to reduce the issues of misrepresentation of the orders through which the companies are able to achieve their desired goals on time. Lastly, it was noted through the study of Wegrzyn and Wang (2021) that datasets in terms of different customers can be recorded by the suppliers with the help of blockchain easily, through which they will be able to view the defects of the products or detect the missing quantity of the products without any efforts. This can further help the companies to increase their profit margins as the life cycle of the products can be tackled efficiently, which can also boost the valuation of the particular company in the competitive marketplace.

Effects of using AI in supply chain

After the negative impact of COVID-19 on the retail sector and its supply chain management all over the UK, the managers have decided to implement AI and big data to improve the storage and transfer of products to potential customers. AI, in this case, helps to provide smart storage options for the products, which reduce waste and provide autonomous vehicles for the transportation of the products so that the issues of pollution in the social environment of the UK can be reduced, as per Writer (2018). It also helps to provide appropriate forecasts about the needs of the customers or the trends in the marketplace, through which the companies will be able to meet the expectations of the targeted audience before its competitors. This can also boost the loyalty of the customers, which can further increase the rate of return on investment in the future. AI also provides safety in the workplace, through which the commitment of the employees increases and the managers are able to manage the operational cost within the predetermined budget and earn higher profit margins, according to a study by Writer (2018).

The challenges of using AI, on the other hand, include that the cost of implementing the tools is high, and the small or medium-sized enterprises within the marketing environment of the retail industry are unable to stick to the cost due to their low budget. Apart from this, due to the unavailability of expertise, issues of poor performance can be noted in the supply chain department of retail companies, through which the development or growth of individuals can be reduced over the long run, as per the study of Cram (2023). As a result, the cost of management in the companies can be increased, which can further reduce the attraction of potential customers. Apart from this, the future implications of AI in the supply chain include that it can help supply chain managers adapt to changes efficiently as they are able to enhance the decision-making process with the help of real-time data. It can also help to automate the processes, which can further help the companies reduce the issues of repetitive performance and promote flexibility in the workplace for the long term.

Methodology

The researcher has used a secondary data collection method to gather important information on the use of the blockchain and AI for further enhancing the supply chain management of the retail companies all over the UK with the help of the existing sources. In this case, various articles, journal papers, websites and books have been reviewed by the researcher to gather the updated knowledge on the topic so that the key benefits and challenges can be addressed. Apart from this, the use of Google Scholar, IEEE, Xplorer, etc. has been used by the researcher as they provide free information, which also saves time as compared to the primary data collection method.

The researcher has also used interpretivism to gather reliable information on the companies which use AI in their supply chain department to enhance the storage of the products and supply the finished ones to the customers. In association to this, the interpretivism philosophy has also helped the researcher to gather relevant data on the current issues faced by the supply chain managers and the problems faced by the company to promote positive relationships with the stakeholders in the competitive marketing environment. It has further helped to analyse the behaviour of the supply chain team in terms of AI which can further enhance the overall performance of the company.

The researcher has also used an inductive approach to investigate the current marketing trends through which the supply chain managers will be able to enhance the performance of the companies. In this case, the approach can also help to analyse certain theories discussed in the existing sources, such as leadership theory which can help to train the supply chain team members through which they are able to coordinate with the performance of AI efficiently. Lastly, it has also helped the researcher to determine potential solutions through which the supply chain team of the retail sectors will be able to reduce their operational cost for the long term.

On the other hand, the qualitative researcher strategy is used by the researchers to gather the relevant information in non-numerical data sets, which can help to determine the key benefits of the blockchain techniques and the AI tools in the supply chain departments of the different industries such as clothing retail or consumer goods retail. It has also helped the researcher to present both in-general data and important concepts through which they are able to interpret logical aspects while explaining the benefits of the tools used in the supply chain management of the retail companies.

The researcher has also used an explanatory design in the study, which furthers the issues of misconduct as it limits the scope of information to the objectives and aims predetermined for the report. It has also helped to increase the knowledge on the particular topic, which further helps to determine the situation of supply chain management in future with the application of the blockchain and AI tools. Through the study, the retail sector can also know the effect of the advanced technologies, including both positive and negative, on the supply chain team.

Lastly, the researcher has used narrative analysis through which the attention of the readers has been maintained. This analysis has helped the researcher to present the study in the form of a story through which the readers can get a detailed analysis of the types of AI tools and their advantages to the supply chain department of the company. This analysis has also helped to draw relevant conclusions through which the issues of presenting new information at the end of the study can be reduced over the time being.

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Conclusion

It can be concluded through the study that the integration of the blockchain and AI can help to improve the digital aspects of the supply chain management of different companies operating in the UK retail sector. The main benefits, in this case, include the accuracy of the collected data through which the companies will be able to innovate the products according to the consumers’ needs and will also help to address the challenges like change in the trade policies. It also helps to reduce the cost of operations through which the company will be able to maintain cost leadership strategies and gain competitive advantage in the marketing world. In the future, tools like big data analytics can be helpful for companies to gain huge datasets at the same time and also help to make advanced decisions as per the changing environment. However, the main challenges faced by the companies include the extra cost required for the implementation of the tools which most of them cannot afford or have to engage with different investigators so that they are able to enhance their performance or productivity over a particular time period.

Reference

Ani (2021). 9 benefits of blockchain in supply chain - bitcoin & crypto guide, Altcoin Buzz. Available at: https://www.altcoinbuzz.io/bitcoin-and-crypto-guide/9-benefits-of-blockchain-in-supply-chain/#:~:text=Accordingly%2C%20the%20benefits%20of%20adopting%20blockchain%20technology%20in,to%20the%20end-user%208%20Asset%20tracking%20More%20items (Accessed: May 2, 2023).

Cram, C., (2023) Ai in the supply chain: Benefits, challenges, future implication, Tech Insight - Providing you with the latest breaking news, videos and research papers fresh from the tech industry. Available at: https://techinsight.net/enterprise-software-applications/supply-chain-management-scm/ai-revolutionizing-supply-chain-management-benefits-challenges-and-future-implications/ (Accessed: May 3, 2023).

Higgins, M. (2022) Council post: Blockchain in Supply Chain, Forbes. Forbes Magazine. Available at: https://www.forbes.com/sites/forbestechcouncil/2021/11/08/blockchain-in-supply-chain/?sh=20645a904e1a (Accessed: May 2, 2023).

Lans, D. (2019) 7 main challenges in supply chain management and how you can work around it, YourStory.com. Available at: https://yourstory.com/mystory/7-main-challenges-in-supply-chain-management-and-h-rdq2oy6mh9#:~:text=What%20are%20the%20main%20challenges%20in%20supply%20chain,6%206.Unforeseen%20Delays%20...%207%207.Fast-Changing%20Markets%20 (Accessed: 02 May 2023).

Retail Think Tank, 2016. The supply chain crisis in the retail sector (Online). Available at: http://www.retailthinktank.co.uk/whitepaper/supply-chain-crisis-retail-sector/#:~:text=The%20supply%20chain%20crisis%20in%20the%20retail%20sector,retail%20supply%20chain%20returns%20to%20normality.%20More%20items (Accessed: 02 May 2023).

Wegrzyn, K.E., and Wang, E., (2021). The Pros and cons of Blockchain in supply chain, Foley & Lardner LLP. Foley & Lardner LLP. Available at: https://www.foley.com/en/insights/publications/2021/08/the-pros-and-cons-of-blockchain-in-supply-chain (Accessed: May 2, 2023).

Writer, S., 2018. The Pros and cons of an AI-based supply chain (no date) Thomasnet® - Product Sourcing and Supplier Discovery Platform - Find North American Manufacturers, Suppliers and Industrial Companies. Available at: https://www.thomasnet.com/insights/the-pros-and-cons-of-an-ai-based-supply-chain/ (Accessed: May 3, 2023).