From demand forecasting and data analytics to problem solving abilities, Artificial Intelligence is being leveraged as an efficient supply chain management solution
Advancements in technology, along with the disruption caused by the pandemic, have led to a complex, modern supply chain. The management of a global supply chain becomes more chaotic, causing businesses worldwide to work out new strategies for better profitability and agility. The most popular technology that is supporting the management of supply chains during these tough times is Artificial Intelligence (AI).
Extra labor, bigger workspace, and more human expertise is no more the need of the hour. AI has taken over the workload and promises a better management system with automation, decision support, demand forecasting, and predictive to prescriptive AI-based analytics. AI-enabled solutions also include problem-solving abilities from delayed deliveries to weather-related complications.
The AI transformation has been rapidly activated in the span of months due to the new customer expectations. Experts reckon that the management process will grow substantially in the coming years with better quality control and optimization. AI systems perform tasks similar to that of human thinking patterns and can sense and respond to data attributes.
Additionally, cloud-based applications like manufacturing execution systems (MES), warehouse management systems (WMS), and enterprise resource planning (ERP) have also been taken over by AI and AI-driven analytics. With such transformations, smart predictions about raw materials, WIP components, and product demands can help supply chain systems develop a smart factory. Capgemini’s research predicts that smart manufacturing platforms alone will grow exponentially in the next three years. It also claims that success is only possible if the strategy for scalability is powerful.
An AI-driven Management Strategy
Allowing autonomous planning of both internal and external data of customers, suppliers, and other economic indicators, AI-driven management solutions can make smart predictions. Through predictive maintenance, it can also help analyze historical machine data and suggest the most likely model failures. With reduced time and costs, AI-led systems can enhance the management process by avoiding possible problems.
A McKinsey report supports this conclusion as 61 percent of respondents claimed to have been able to reduce costs as a result of an AI-enabled supply management system. Moreover, 53 percent of respondents reported an increase in ROI. Apart from the usual use cases including Inventory Management, shipping process optimization, workforce management, reduced customer response time, and supplier relationship management, AI-driven management solutions also help maintain the warehouse and act as a foreign language decoder.
These solutions also help with inventory reductions, decreased labor and transportation costs, making them the holy grail of revenue success in the current environment.
Security in warehouses is enabled by facial recognition technology, and AI-driven solutions can also keep track of the items on the shelves. They have the ability to read the barcode of the packages that are dropped in the facility, and update the inventory, simultaneously. Experts claim that such unmanned warehouses, powered with AI, are proving to be more efficient than human management. Meanwhile, supply chains are now catering to a global customer audience, and miscommunication is possible. Businesses seek AI solutions that are better equipped to handle customers of any culture and language. Understanding and analyzing foreign products and global market trends are also handled by AI today.
A surprising fact that many enterprises might not be aware of, is that AI has been part of their management system much before the active installation. Now as an active trend, AI is being pushed as a front-row guest.
Several global enterprises have embraced AI-powered supply chain management systems as it has become a crucial requirement to keep up with the economic trends and stay ahead of the competition. Experts also suggest caution as the change has been rapid and could cause complications in the future. They recommend enterprises to work on digital tool integration, in-house skills alignment, and data readiness while brainstorming for a better AI strategy and supply chain management roadmap.