Artificial intelligence is needed in supply chain management

IN the name of globalization or borderless world, of late a big chunk of manufacturing production world-wide has been organized in what has become known as Global Value Chains (GVCs).

Pandemic Covid-19 has struck at the core of global value chain hub regions, including China, Europe and the US. As production comes back up to speed, companies are scrambling for a means of monitoring the inbound flow of product, to figure out how it can be received, stored and shipped at a time when demand for all but the most critical items has ceased.

Logistically speaking this has prompted many businesses to review their current supply chain processes and to evaluate how they might build in resilience ahead of any future disruption. Digitalization or better known as artificial Intelligence (A.I) is all important for industry in this current climate, both to increase margins and operational performance in good times and to adapt in the bad. It is a technology that is already impacting how users interact with, and are affected by the Internet.

AI traditionally refers to an artificial creation of humanlike intelligence that can learn, reason, plan, perceive, or process natural language. These traits allow it to bring immense socioeconomic opportunities, while also posing ethical and socio-economic challenges. (I shall discuss this issue in due course)

Many management gurus believe that the impact of AI is set to continue growing. Rightly or wrongly, AI has the potential to vastly change the way that humans interact, not only with the digital world, but also with each other, through their work and through other socioeconomic institutions – for better or for worse.

To date AI has reached a key juncture where the realworld benefits are instantly recognizable. In the industrial sector, AI application is supported by the increasing adoption of devices and sensors connected through the Internet of Things (IoT).

In supply chain management AI improves supply chain automation through the use of virtual assistants, which are used both internally (within a given enterprise) as well as between supply chain members (e.g., customer-supplier chains).

It is getting a lot of buzz of excitement and activities right now as companies grapple with a skilled labour shortage and everchanging customer demands.

With its bent for managing mundane, repetitive tasks and freeing up employees to focus on more important things, AI has rapidly gained momentum in supply chain management.

Plagued with inefficiencies but expected to perform at high levels of efficiency and speed, this critical business component is ripe for improvement via AI and automation in general. It can be used to predict demand, modify orders, and re-route in-transit goods to warehouses where needed. Such planning and agility in logistics means better service and lower logistics costs.

Warehouse automation systems provide an opportunity to conquer a lot of routine tasks. Impact of artificial intelligence in Logistics include ….

Predictive capabilities will rise. ...

Robotics . ...

Big data . ... Computer vision . ... Autonomous vehicles . ... AI offers contextual intelligence . ...

AI offers insights to boost productivity . ...

AI helps with demand forecasting by analyzing large volumes of data.

We cannot deny that AI is a rapidly advancing technology, made possible by the Internet, that may soon have significant impacts on our everyday lives.

Amid these changes, companies can gainfully reap more and more benefits through deeper insight into cost vs risk decisions, an improved understanding of business processes and associated efficiencies, and better forecasts of future events.

Businesses now need to be incredibly nimble to manage the costs of turning down production, followed by the working capital constraints to then rebuild production levels as economies recover.

We are also seeing a period of distrust and disinformation while global supply chains are disrupted, data is key to traceability and provenance ensuring that drugs and food come from authentic sources.

Better visibility allows us to understand where resources such as food and pharmaceuticals are and how we can get energy efficiently to those who need it.

Digital transformation stands to provide an immediate and compelling competitive advantage for those quick to adopt – and to demonstrate provenance.

AI is a key discriminator and a propelling force behind improvements in the supply chain.