Gaining Supply Chain Efficiency With Artificial Intelligence

Supply Chain & Artificial intelligence

Artificial intelligence (AI) will change the way you think about your supply chain and supply chain efficiency.

Today’s supply chain complexities demand additional support.

You cannot afford to pass up on automating at least some of the processes.

And no, you don’t have to have robots replacing all your human workers at your facility.

AI goes beyond just robots to include automated processes in computers and more.

Implementing AI in your supply chain will make your life easier and your business more streamlined.

Increased Supply Chain Efficiency Means Maintenance Made Easy

Maintaining your equipment requires regular repairs and upkeep. But what if there was a way to know exactly when to conduct those tasks? You’d save money while cutting downtime.

The secret behind this lies in automating data collection through Industry 4.0 to automate the process.

Artificial intelligence collects information from sensors on equipment, which combines with maintenance records.

The system analyzes the information to predict the best time to repair your equipment, which is called predictive maintenance. And it could boost your productivity by 20 percent and cut maintenance costs by 10 percent.

Manage Your Warehouse Painlessly

The most familiar AI examples in industrial settings are warehouse robots that automatically pull products from shelves for shipping. This use of AI helps protect human workers from the dangerous tasks around a warehouse.

It also improves accuracy and safety in the warehouse. Smart robots can avoid obstacles like people and shelving for easier maneuvering when retrieving or storing products.

With AI, you can control multiple pieces of equipment in your facility from a single panel, which lessens the need for numerous low-skilled laborers. Though AI can replace some low-skill tasks, it cannot replace all jobs, such as supply chain managers.

Predictions claim job openings for supply chain managers could outnumber prospective employees by a ratio of six to one.

The good news is that your job as a supply chain manager is safe, but your task will change to integrate controlling AI and analyzing data from a smart warehouse.

Improve Inventory

One of the hardest aspects of being a supply chain manager is predicting what to keep in stock. When two large auto suppliers used AI to predict how much stock they’d need, they decreased inventory by up to 40 percent. Cutting needless inventory is the best means of freeing up space in your warehouse for stocking more products you sell.

Read: 8 Fundamentals for Achieving Artificial Intelligence Success in the Supply Chain

Predictive modeling uses AI to examine consumer trends and help you identify which products to stock. You can reduce revenue losses from not having the right products immediately available up to 65 percent. Predictive modeling can also cut forecasting errors by anywhere from 20 to 50 percent.

There are too many variables at play for humans to accurately predict the appropriate inventory levels in real time. AI can solve these inaccuracies, making your facility more efficient.

Keep Track of Suppliers

To ease your job and improve supply chain efficiency, you need constant communications with your suppliers. Artificial intelligence allows for synchronization throughout the supply chain. You can send information about predicted customer demand down the line, so you suppliers produce just enough to avoid overproduction waste.

Thanks to synchronous supply chain planning, you and your suppliers can make decisions in real time. A restaurant took advantage of AI in its supply chain, and the facility cut excess supplies and became more efficient and flexible.

Connectivity of devices and sharing data is critical to AI use in a supply chain. While this connectivity allows equipment to send information about production back and forth, it can also be useful throughout the supply chain. You can store the information you collected through AI in the cloud for others in the supply chain to access.

When inventory levels drop, the AI monitoring those can automatically signal a supplier to send more.

Smarten Your Shipping

Shipping also becomes smarter thanks to AI. Though driverless cars are still in testing mode, they could become the norm in the future. Additionally, AI can make more accurate predictions about shipping times.

TransVoyant uses machine-learning artificial intelligence to account for weather, natural disasters, road conditions and more to make accurate arrival times for shipments.

With machine-predicted shipment times, you can more accurately stage your warehouse to receive shipments at a given time. Your customers will also be happier with the accurate arrival time. AI makes shipment problems outdated.

AI and the Future of Supply Chains

Future supply chains will necessitate the use of AI and integrate more data collection. Without taking advantage of the latest technology, supply chains become inefficient and unable to compete.

With higher consumer expectations and demands throughout the supply chain for faster turnarounds, industry requires the improvements AI can supply.

About the Author

Megan Ray Nichols is a freelance science writer interested in engineering, technology, and other science disciplines. She is a regular contributor to Manufacturing Transformation and American Machinist. Megan is also the editor of Schooled By Science. Subscribe to her blog to stay up to date on scientific news and follow her on Twitter.

The Top Supply Chain Trends that Will Impact Supply Chain Management in 2018

The type and capabilities of supply chain technology is expanding, and technology will only grow more important in effective supply chain management in 2018.

From the increased demand to data-driven decision-making through the industrial Internet of things (IIoT) to the use of cloud-based technologies, supply chain technology will advance light years in the coming months.

Supply chain managers and leaders need to understand which technology trends will be the dominant forces of change and continuous improvement in the coming year.

#10. Use of Artificial Intelligence Will Increase

An increased ability to use AI will result in greater use of AI. It is a self-fulfilling prophecy, but not the dark images that come from Terminator. AI includes machine learning and deep learning, allowing machines to self-optimize performance and alert managers of potential failures or issues before they occur.

In fact, up to 80 percent of companies already use AI, explains Louis Colombus in Forbes Magazine, and 30 percent of companies are planning on expanding AI investments in the next three years. Moreover, this will result in the hiring of AI experts and a Chief AI Officer. 

The use of AI will lead to better responsiveness by customer service representatives, and since the technology hinges on automation, order accuracy will increase, which will enable better spend analysis and cost reductions through newer, more advanced analytics, reports Medium.

Since up to 79 percent of supply chain managers surveyed cited cost reductions as a top area of concern, investments in and use of AI will increase.

Download: The Top Supply Chain Trends that Will Impact Supply Chain Management in 2018