E-commerce is on the move, and it is up to the physical stores to sharpen their offers if they are to survive. As a PhD student at the Department of Technology Management and Economics, Emmelie Gustafsson is interested in how digital modeling can add more value for the customer - and at the same time create a more efficient supply chain.
Emmelie Gustafsson presents the results in her licentiate thesis: "Digital model-driven retail supply chain management". This is how she describes her research, with her own words
Tell us about your research!
The purpose of my research is to increase the understanding of how matching of digital models of products and customers can be used to shift the performance frontier in retail supply chains.
I put forward the matching of digital models as an operational practice used by retail supply chains. So, how does these models work?
- Digital product models are digital descriptions of available products on the market, that contain information about the products’ characteristics.
- Digital customer models are digital descriptions of customers and contain customer characteristics and preferences.
The research concerns product recommendations based on matching of digital product and customer models.Why is this important?
In retail today, there is an enormous supply of products. This means large inventory holding costs, at the same time as the products face the risk of becoming obsolete. If we can match product to customer or vice versa, supply and demand can be matched. This means that available products on the market are better utilized and customer demand is better served.What are your most important research findings?
By using matching technology, the trade-off between cost efficiency and responsiveness can be bypassed. In other words: it is possible to achieve both production efficiency and delivery performance at the same time in retail supply chains. And also, to more fully utilize the existing product variety in already manufactured product supply, to move the performance frontier in retail supply chains.What do you hope for your research to lead to?
I hope that my research leads to better resource utilization, there is too much waste in retail today. My research also supports several supply chain actors. Customers can more easily navigate in the available product supply, manufacturers can use the customer models and create products which are better aligned with customer demand, retailers can use the customer models as decision support when steering which assortment to offer, and they can also serve customers more efficiently.What will be the next step in your research?
During the last half of my PhD journey, I will implement the operational practice and evaluate its effects. A foot scanner is going to be installed at a shoe store in Stockholm, and the shoe assortment will be turned into digital models by scanning the inside of the shoes. When the customers scan their feet they see a list of fitting shoes in the shop. An app enables the customers to also use their digital model in the web channel. The goal is to evaluate the effects that the operational practice result in, for example fewer returns, in-shop operations efficiency and fewer order lines in web retail.
Text: Ulrika Ernström
Emmelie Gustafsson is a PhD student at Chalmers, the Department of Technology Management and Economics and Organization, at the Supply and Operations Management division. She researches retail planning within operations and supply chain management.