How Artificial Intelligence Will Play a Vital Role in the Supply Chain
Artificial intelligence (AI) in supply chain management has been highly beneficial to many businesses. Over the past few years alone there have been considerable advancements in the field, and many people believe it is the next step in the digital revolution with its potential for total automation and error-free processes. Some believe AI should always be regulated to ensure there are no security or safety risks. Whether companies are feeling positive about AI or not, it is creeping into industrial processes through technology and the devices we use. Manufacturing sectors are noticing this change and have begun making investments in AI to improve business and supply chain functions. If you want to know how AI will affect the supply chain, here’s some important information to consider.
Artificial Intelligence in Supply Chain Planning
AI is created by machines that operate similarly to human minds—with free thought. When a machine makes its own decisions based on historical collected data, it can achieve a goal. This process is known as AI. AI can be classified as being part of the fields of robotics, software programming, image recognition, transportation, and much more. It is generally organized into two categories, which are explained below.
- Augmentation: AI that helps humans with daily tasks without having complete control of the output. Some examples of augmentation include virtual assistants, data analysis, and software solutions. Augmentation is generally used to reduce errors that occur due to human bias.
- Automation: AI that works completely on its own in any field without any human intervention. Robots that perform key process steps in manufacturing plants are an example of automation.
Increase in Productivity and Profits
By reducing the cost of processes and saving time on them, AI has made the supply chain more productive and profitable for businesses. Services like Amazon Prime have used AI to streamline processes and manage customer expectations. For example, they send customers automated messages to update them on product tracking. This manages their expectations, which means repeat business, and it simultaneously boosts productivity. AI can handle trivial supply chain tasks without error in a shorter period of time. For example, dealing with invoice exceptions, discrepancies, and errors or responding to supplier inquiries are duties that can take hours and days. Now, AI can handle these manual processes.
AI can adapt to changing scenarios and handle the entire supply chain process. Using historical data and trends, AI can streamline every aspect from demand to inventory to supply and meet the needs of the market. With minimal human input, time saved, and reduced errors, AI provides a variety of benefits to manufacturers. Also, since AI has vast memory options available, it can learn from past mistakes and adapt to ensure there are fewer errors going forward.
Predictive algorithms can allow AI systems to shorten delivery times and improve efficiency. These algorithms predict demand before a request order is placed. Global supply chain managers can use AI systems to detect risks in trade shipping lanes, and tools like shock-detecting sensors can make them aware of potential damage to cargo. Using this data, managers can take corrective action to minimize operational delays. Machine-learning systems may also be able to recognize customer behaviour through common scenarios and trends, allowing for items to be pre-picked and packed before orders are made. This allows for better productivity and efficiency in the supply chain.
AI for Global Supply Chain Management
Planning, optimization, and demand forecasting is a challenge in the global supply chain. AI may be essential to identifying and predicting problems and finding potential solutions. Supply chain managers need to absorb more data than any person can possibly process, and since this is such a difficult feat, many companies do not understand the full depth of their supply chain risks. Being unprepared to respond efficiently or effectively can cause disruptions in the supply chain. This is where AI comes in. These programs can absorb a high volume of data, organize it efficiently, and extract the necessary insights to suggest or make informed decisions. AI can also gather and analyze external data from multiple sources, including newsfeeds, social media, weather reports, and historical data.
Chatbots for Procurement Process
Chatbots provide automation and augmentation, which can streamline the procurement process. These bots can perform daily tasks such as:
- Speaking to suppliers during trivial conversations
- Placing purchasing requests
- Researching and answering internal questions about procurement functionalities
- Receiving, filing, and documenting invoices and payments and placing order requests
Warehouse Management with Machine Learning
AI can use algorithms and data streams to make predictions about various processes in the supply chain. This endless loop of forecasting is also self-improving, which could reshape warehouse management for the better.
Self-Driving and Unmanned Vehicle Technology
AI can be used for the internal, data-crunching aspects of the supply chain, but it can also be used for mechanical processes. Aside from production machinery, AI can also optimize transportation. Automotive and tech companies like Tesla and Google have been testing driverless cars for several years now and have produced impressive results. If this technology can be fully developed, it will drive product transportation and shipments. AI could help improve accuracy, decrease lead times, and reduce transportation and human labour costs.
Get Logistics and Warehouse Robotics Support at LSS
Lean Supply Solutions can help you if you are looking for a third-party logistics company with the latest technology in artificial intelligence. We always strive to stay up to date on the rising trends in e-commerce warehouses. We commit to being aware of our clients’ operational challenges as they arise and helping them get the most out of their processes. Our third-party logistics, packaging, and supply chain management can streamline your processes for better success, and by striving to ensure that the right products are provided to the right customers at the right time, we can offer consistent, accurate, and quality results. To learn more about outsourcing to our 3PL distribution team, or to ask any questions, contact us today.