Artificial Intelligence In Supply Chain Management – The growth of artificial intelligence in recent years is nothing short of amazing. Many people think of a number of different consumer applications for artificial intelligence, such as smart home speakers, self-driving cars, and how Netflix always seems to know what someone wants to watch next. But the enterprise growth of AI has also been impressive, as many companies seek to harness the power of artificial intelligence to improve operations, cut costs and take the next step forward. In fact, business use of artificial intelligence has grown by 270% in the last 4 years.
For those looking to bring elements of artificial intelligence into their business, that first step can seem daunting. After all, implementing a new technology in an existing company can mean that big changes are ahead. How do decision makers ensure that this is the right change to make? There are always many questions about artificial intelligence.
Artificial Intelligence In Supply Chain Management
One of the most important areas where companies have made the leap to embrace artificial intelligence is in supply chain management. Due to the many complexities and intertwined processes of supply chain management, artificial intelligence is a logical way for companies to make improvements. But if you’re trying to make this change, what are a few things you should know before you dive in?
Artificial Intelligence (ai) In Supply Chain Management And Logistics
One of the first concerns many people have about artificial intelligence is the effect it will have on human employees. Will people lose their jobs? This is a valid concern when discussing the concept of automation. The fact is, however, artificial intelligence is designed to enable human employees to do their best work rather than replace them entirely.
Half of employees say they spend 50% of their day on entrepreneurial tasks. These tasks may be important to get done, but they are time consuming and don’t require a lot of thought or effort. AI gives companies the opportunity to take many of these menial, time-consuming tasks away from employees and enable them to focus on other things where they can be more productive and fully utilize their skills.
Take data crunching for example; a company could have an employee sift through mountains of data, looking for important points, and then build a report on their findings. Or, with the help of artificial intelligence, the data can be quickly analyzed with suggestions made to the human staff on which they can make the final decision. Hours per day could be saved for each employee that can be used to focus on things humans do better than AI, such as engaging directly with customers. And, speaking of data…
Many people think of artificial intelligence as a kind of limitless power of efficiency. Although there is a lot of room for artificial intelligence to grow, the real advantage of AI today is having massive amounts of data analyzed quickly. Companies have more data available than ever before, but this comes with the new problem of somehow analyzing all that data. A person doing this task can be a full-time job. Artificial intelligence can analyze this increasing number of data points faster and more efficiently.
Ways Technology Can Help To Strengthen Supply Chains
What does this mean for a supply chain? Small details like changes in order frequency, delivery vehicle routes, schedule trends, and more can all be seen, analyzed and planned for quickly. Artificial intelligence is best for using historical data and spotting patterns or trends. No matter how small the trend may be, the artificial intelligence platform can detect it and help companies make better supply chain management decisions.
When it comes to supply chain management, artificial intelligence is not only about making the supply chain more efficient and cost effective for the company. AI can also help deliver better customer experiences. Of course, customers love it when their shipments arrive on time, which art can certainly help with. But that’s just the beginning of the customer experience equation.
Artificial intelligence can help predict customer order trends so that sales staff can achieve proactively. Perhaps customer order history can provide insight into recommended products of interest that may be offered in the future. All this can be achieved with artificial intelligence and, best of all, providing this quality experience can lead to increased revenue as well as an improved reputation.
There is a lot to learn about artificial intelligence and how it can improve supply chain management. As technology improves, the number of data points increases, and business needs change, there’s no telling how much business can achieve with AI. To learn more, contact AI Direct today.Many companies pursuing artificial intelligence (AI) initiatives are doing so as additions to their existing technology. While I applaud the initiative of these companies, I think many of these projects will not produce the expected value.
What Is Supply Chain In Artificial Intelligence Management
The supply chain is full of data, but unfortunately, due to the nature of the systems involved, much of it is lost or outdated, and nowhere in real time. Which means AI functions semi-blind, hampered by missing and conflicting data. The results are thus compromised, and fall far short of the true value of AI.
The old way didn’t work. The supply chain is inherently multi-party and multi-echelon. It requires coordination across departments and functions, and across layers of trading partners. Today’s software-centric software is not architected to handle today’s network business environments, so you end up with point-to-point connections, hub-and-spoke portals, and a complex mix of patchwork systems.
Silos in the supply chain take the intelligence out of artificial intelligence. Algorithms and intelligent agents cannot fully optimize the supply chain based on stale and incomplete data. – Nigel Duckworth @onenetwork #AI #supplychain Click to tweet
Trying to optimize the supply chain is practically impossible with legacy technologies. You have siled data and disconnected algorithms and optimization engines. The best you can get is optimization within silos, but that is far from planning and optimizing the entire network, based on real-time data that takes into account all orders, inventory, shipments, logistics, as well as constraints. You end up overstaffed and under-optimized.
Building Supply Chain Resiliency With Ai Driven Workflows
It took a while, but now industry analysts from Gartner, IDC, Nucleus Research and ChainLink Research have recognized the value of enterprise network technologies and their unique ability to solve supply chain problems simply and efficiently.
The key is the network. It can unlock the full potential value trapped in your supply chain. So far, with stale data we have been doing weekly planning with daily adjustments. Without timely data, we cannot respond to hourly, or even daily, problems that arise and solve them. So, we load up our inventory buffers and expedite much more than necessary.
When you combine the new business network model with artificial intelligence, everything changes. We have all the relevant data we need to fully optimize the supply chain. The new technologies can handle large volumes of data, sift, analyze, create alerts, and even address problems, in real time. Inventory buffers come down, shipments practically disappear, customer service goes up. The value is incredible.
McKinsey considered the potential of merging machine learning and AI with network operations to manage the supply chain. In their report on Supply Chain 4.0, they estimate that moving from ERP as a hub-and-spoke type system, to a network model powered by AI, companies have the potential to reduce operational costs by 30%, reduce lost sales by 75% , and reduce inventories by 75%.
Does Artificial Intelligence Enabled Demand Forecasting Improve Supply Chain Efficiency?
These numbers are not unrealistic, although I don’t think we are there yet. At One Network Enterprises, we see our customers go from middle of the pack supply chain metrics to numbers that are unheard of in their industry.
Joe Bellini from One Network will talk more about this in the webinar, AI in the Supply Chain. A network foundation is just one of the eight prerequisites for getting value from AI in your supply chain that will be covered in the webinar. The webinar will provide you with all the essentials you need to know to understand how AI fits into the supply chain, and how to get maximum value from it. It will cover the technology and data, giving you an overview of key types of algorithms that can be used to optimize the supply chain; how to avoid “black box” algorithms; the power of intelligent agents; and so much more. We hope this webinar will be the most valuable 45 minutes of your week – and look forward to seeing you there.
Nigel Duckworth is a writer and content director at One Network. He focuses on innovation and how companies can achieve business value from technology. Change is inevitable. We must constantly adapt to changes around us in order to survive in the world and the manufacturing sector is no exception. Many companies have used artificial intelligence to improve their bottom line. Artificial intelligence helps identify the flaws in the system, suggests purchases to new and returning customers and streamlines the supply chain process. In fact, according to the reports, supply chain is one area today that is harnessing the benefits of AI.
With the growth of manufacturing companies, the volume of data has also increased drastically. That’s why companies are looking for more sophisticated
Benefits Of Artificial Intelligence In Supply Chain Management
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