CASE STUDY Read the article below and answer the questions that follow. Building a Digital Supply Chain Ready for the Future Complaints from frustrated customers were mounting at a major US retailer. More than 20% said they could not find the companys branded products in shops because items were out of stock. The problem was that efforts to improve service disrupted the companys low-cost distribution model. It had the right infrastructure but lacked the digital tools necessary to increase supply chain reliability. Moving quickly, the leadership team invested in digital tools to obtain real-time data, shorten replenishment cycle times, optimize deliveries and predict future demand. As data streamed in from stores the minute shoppers purchased goods, the company rapidly restocked hot-selling items to capture sales that it previously had lost. The shift cut retail cycle times by 20%, to four days, generating a 0.5% increase in sales. And that was just the first wave of improvement. Over the next 24 months, the company aims to reduce the time needed to fill store orders to two days, for a 60% total reduction in retail cycle time. Companies that integrate digital technologies into their supply chain can quickly improve service levels while cutting costs up to 30%. Just as important are the options that digital technologies provide to develop new business models and new strategies. For instance, leading-edge companies such as Adidas are deploying 3D printing to move some production closer to customers, offering greater product customization and shorter lead times. Despite those advantages, many companies are struggling to keep pace with an onslaught of digital trends that are disrupting traditional supply chain management, slashing response times and raising customers expectations. The speed of change is overwhelming, especially for those that are not digital natives. Seventy percent of executives expect digital innovation to have a significant impact on their supply chains during the next five years, according to a recent Bain survey, up from just 63% in 2016.

QUESTION Provide an examination of the factors that the managers of US retail companies had to take into consideration upon making a decision on the adoption of Supply Chain Information Technology. (10 Marks)