With the procurement of Christmas (buying Christmas items) adding to stress levels among practitioners in supply chain jobs across the world, a seasoned supply chain executive details how AI can remove the strain, helping them make better decisions, more efficiently, and crucially, in a more repeatable way.
IBM Supply Chain Consultant, Roger Needham, identifies four key supply chain challenges. Visibility – knowing where all the moving elements of a supply chain are at any time. Sales – would improving visibility of the supply chain help practitioners get the right products to the right destinations at the right time? Inventory – poor inventory visibility often drives increases in working capital, the lifeblood of any commercial enterprise. Change – keeping pace with the rate of change by incorporating new supply chains and systems.
Supply chain pros rely on dashboard alerts to notify them of a problem and they then approach subject matter experts to find the optimal solution. But there are major problems. Dashboards track internal data only and if the same problem reappears a year or two later, the experts who helped solve it may have left, meaning their knowledge is no longer available.
AI overcomes these deficits by drawing on a broader range of data. If a supply chain relies critically on, say, Shanghai and Rotterdam, AI can track world events, including financial developments, geopolitics, and weather, which could obstruct or compromise the trade lane flow. It is also selective, focusing on the areas of the supply chain that matter most to a business. Because it retains all the conversations, inputs, and outputs that went into the resolution, the knowledge never disappears, so that solutions are repeatable over time. Needham says that supply chain AI has helped his firm cut its data retrieval time by 75% and saved $40 million in freight and inventory costs. It’s coming and appears to be worth it.
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