Alibaba Cloud, participated in our 6th Latin American Congress of Technology and Business America Digital · 100% Online, and today it proudly presents itself as a partner of many companies worldwide in their journey of digital transformation and business innovation. Since the COVID-19 outbreak, people are now increasingly dependent on information technology in their work and in their daily lives. We see a large increase in the demand for digital transformation and believe that the application of Machine Learning / Artificial Intelligence (ML / AI) is critical to address that need.

Digital transformation was never meant to be easy. It is a long and continuous process, during which the original vision and the business problem can easily be forgotten. As a result, business innovation and customer experiences often lag behind. From our experience, the crux is choosing a point of origin to start with. This point of origin should address immediate business issues and act as a foundation for further transformation.

One approach that Alibaba Cloud provides to solve this problem is by leveraging ML / AI as a catalyst. In this article, we will focus on the application of ML / AI in supply chain management in the retail industry, especially how we can use ML / AI technologies to reduce uncertainty and latency in the supply chain.

As a complex system, many challenges faced by a company’s supply chain stem from various types of uncertainty. To name a few: inventory quality can vary, demands can fluctuate, and communication between different stakeholders can be adversely affected. At the supply chain level, this results in a structural stockout – there are many stocks for all items at the company-wide level, while many retail stores are faced with a stockout of certain products. To alleviate this problem, sales forecasts based on ML / AI techniques can provide highly accurate predictions at different granularities and handle the impact of events such as sales and weather conditions with ease. With their help, a business can increase sales and reduce stock costs by better matching its products, customers, and locations.

Another common challenge in the supply chain is the numerous delays. Supply chains usually have several segments. At every step, decision-making and compliance will bring latency to the entire system. Here we use store replenishment as an example. Traditionally, store replenishment is triggered when inventory falls below safety stock, which is generally calculated using some empirical equations. Then the distribution center will send out a fleet to supply it store by store. ML / AI-assisted solutions can improve it in multiple ways. With more transparent real-time and historical data, safety stock can be dynamically calculated with reference to forecasted sales and expected delivery time. With advanced routing algorithms, our solution also takes different replenishment strategies based on warehouse types, so replenishment can be completed faster and more cost-effectively.

The applications we presented above are provided by our Data Intelligence Platform (DIP) solution. DIP aims to provide operational teams with a deeper understanding of the business, making data-driven decisions faster, and becoming smarter and more proactive. It also lays the foundation for future transformation by establishing a data foundation. Beneath the out-of-the-box ML / AL applications, we also build a unified data system in which data from various places will be cleaned, integrated, and algorithm ready. Building on this, many other business innovations in omnichannel sales, smart store operations, and user experiences are possible.

Alibaba Cloud has accompanied many of its partners on their digital transformation journey. We offer various products, from modular solutions to end-to-end integrated solutions. But we are also more than that. Our own experience of growth has given us a belief: our goal is to foster long-term strategic relationships with our partners to innovate and grow together. With new technologies, strong business architecture, experience in operations and DNA of innovation, we look forward to being your partner for your next project.