Have you ever given a thought to applying machine learning and other types of AI to the terabytes of transactional and sensor data being collected from the supply chain? The time is here and the amazing result you get will definitely be a much more autonomous and effective form of supply chain analytics, supply chain management, and, ultimately, an overwhelming as well as highly responsive supply chain.
David Simchi-Levi, a professor of engineering systems at MIT says, “In fact, there is a lot of interest in using AI and machine learning to enhance supply chain analytics.” Where your concentration should be in the supply chain is the opportunity to be able to integrate predictive and prescriptive analytics, which in essence, translates to blending AI and optimizing technologies.
The competition in the global market has become very stiff and you need to take every worthwhile opportunity that comes your way in order to continue to be relevant. The two areas you can efficiently apply AI in your supply chain are, to enable predictive analytics to understand behaviors and for prescriptive analytics, thereby, allowing optimization technologies to take input from machine learning and try to help your brand to make better decisions.
Depending on your brand, your thinking will be how you are going to significantly increase your revenue in the next few years and what you need to do in order to achieve this feat. This is a challenge you have to face and you may not have the mindset to increase your workforce.
The question AI can help answer is, “Can you grow your business without significantly increasing the workforce you currently have?”
The opportunity you have in supply chain management comes from the ability to use machine learning to improve customer prediction and demand prediction. Once you have a good insight to a better demand prediction, you are assured of making the necessary impact on your supply chain, apart from just understanding customer demand.
The important thing about machine learning is that you just don’t come up with the ordinary forecast, you can even go ahead to report what the level of confidence that’s associated with the forecast is.
With this, you are not only able to make a forecast, but you also do it with a lot of confidence. Once you armed with this kind of information, you are on top of the game and know when and if there is the need to redesign your supply chain strategy.
Supply chain management (SCM) is the all-inclusive array of activities you need to design, regulate, and effect a smooth flow of your product’s raw material through production to sales in any way that is the most economical.
SCM incorporates the integrated preparation and performance of processes you need to optimize the movement of materials, information, and assets in functions that broadly include demand planning, sourcing, production, inventory management, and logistics which include warehouse and shipment. You have the opportunity of using both business tact and specialized software in these tasks in order to enhance your competitive advantage.
Supply chain management is an all-encompassing and intricate endeavor that necessitates the reliance and absolute understanding among partners ranging from suppliers to manufacturers and even beyond in order to function properly. As a result of this, you also need change management, collaboration, and risk management for effective supply chain management and to create harmony as well as an undisrupted means of communication between all the participants.
You also must have been encumbered by supply chain sustainability, since you must deem it necessary to have an overview of environmental, social, and legal issues, all added to sustainable procurement. There is no way your mind will not constantly dwell on the closely related concept of corporate social responsibility, whereby your company’s effect on the environment and social well-being is evaluated.
What do you benefit from supply chain management?
By choosing effective strategies and appropriate software to manage the growing complexity of today’s supply chains through the integration of AI, you ensure the following six benefits.
1. Improve customer service
Supply chain management activities can enhance customer service that will breed loyalty and longevity. If you are able to do them effectively, you are assured of your customers’ satisfaction since you will be in the position to ensure that the necessary products are available at the correct location at the right time and in the right quantity.
It’s not an overstatement to say that if you increase your customers’ satisfaction levels, you are on the right path to enabling the building and improvement of your customers’ life-cycles.
2. Increase in ROI
If your target is to increase ROI, then SCM is for you as it also provides a major advantage for your brand to decrease operating costs. SCM activities lead to reducing the cost of purchasing, production, and the total supply chain.
And once your costs are lowered, the ultimate result is an improvement in your company’s financial position by increasing profit, cash flow, and eventually your ROI.
3. Reducing the wears and tears of large fixed assets
Inasmuch as you are in tune with the supply chain management best practices, you are certain of a great reduction in the wears and tears of making use of your large fixed assets especially warehouses and vehicles. You enjoy the opportunity of allowing supply chain experts to redesign your network, for example, to maintain customer service levels which leads to operating lesser warehouses thereby, reducing the overhead associated with owning more.
4. Enhancement of societal wellbeing
Possibly, you have never considered the critical role SCM can play in the wellbeing of society. SCM can be applied in helping to ensure human survival in areas like healthcare improvement, protecting people from climate extremes, and general life sustenance.
Supply chains are depended upon for the delivery of basic life necessities such as food, water, clothing, medications, and healthcare. You can also apply the supply chain for the delivery of electricity to homes and businesses, to provide the energy you need for light, heat, air conditioning, and refrigeration.
5. Job creation
Nothing gives a person more joy than the fact that you can be assured of having food on the table for you and your family and SCM greatly enhances that, which ultimately improves the quality of your life. When jobs are created as occasioned by the supply chain management, the foundation for economic growth and improving standards of living is provided.
An array of job opportunities is provided by SCM due to the fact that supply chain professionals create and manage all of the supply chains in society, as well as see to inventory control, warehousing, branding, and logistics.
6. Improved economic growth
One thing that is common among poor nations is their inability to design and run developed supply chains. On the other hand, nations that have developed their supply chains with strong infrastructures such as large railroad networks, interstate highway systems, and a host of airports and seaports are able to effectively and efficiently exchange goods at reduced costs, thereby enhancing the purchase more products by their citizens and ultimately improving their economic growth and increasing the people’s standard of living.