Flexibility for the Win

Flexibility for the Win

A majority (73%) of retailers say that artificial intelligence and machine learning can add significant value to their demand forecasting processes, and more than half say it will improve other critical supply chain capabilities, finds a global supply chain study from LLamasoft.

In contrast, underperforming retailers have not moved away from strategies designed to find the lowest cost of manufacturing.

While 56% of overperforming retailers, also known as “retail winners,” use technology to model contingency plans for supply chain disruption, only 31% of retailers that are not overperforming do the same, the research finds. Overall, 56% of retailers say they struggle with the ability to respond to rapid shifts, and lack of flexibility costs them during disruptions such as COVID-19, with many seeing a big drop in revenue, the study says.


Additionally, 73% of retail winners monitor capacity, which allows them to prepare for sudden fluctuations in demand and supply, compared to 35% of retailers that are not overperforming. This indicates that retail winners are outperforming the competition by predicting and preparing for the future, LLamasoft says.

Retail winners are taking the following steps to separate themselves from the pack, according to LLamasoft’s research:

  • 53% of retail winners invest in data scientists who are competent in data analysis and modeling tools, versus only 22% of underperforming retailers.
  • 80% of retail winners place a high value on demand forecast modeling using macro indicators versus 65% of underperforming retailers.
  • 53% of retail winners rank geopolitical issues such as tariffs, trade wars, and changing consumer demand as their top three challenges versus 23% of underperforming retailers.
  • 46% of average or underperforming retailers focus on cost at the expense of flexibility, versus 38% of retail winners.

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