• Operations Rx

Supply Chain Artificial Intelligence the Next Horizon

Supply Chain technology and processes have evolved from single echelon planning and fulfillment to multi- echelon networks to omni- channel networks.  While omni- channel enables the ability to engage the customer across multiple avenues at the same time, it falls short of the rapid predictive analytics capability necessary to provide the responsiveness that today’s customer expects.  These increased customer expectations have expedited the need for the capability to cost effectively increase customer cross-channel responsiveness and engagement.  A case in point, today’s multi-echelon networks, while more efficient than their precursor systems and processes, are limited to preset algorithms and the ability of the end user to maintain and keep up with an ever-changing macro and micro customer preferences.  A typical big box retailer manages between 70 to 100 million forecasts across their network and are insufficiently staffed nor have the requisite skill set to meet rapid changes in customer preferences.  As a result, companies continue to deleverage inventory, disappoint customers, and disproportionately invest in technology that only marginally improves their ability to service its customers.

Enter Artificial Intelligence (AI).  AI has ushered in the next wave of technological advancements that is changing the supply chain landscape. With AI you can now take the attributes of omni- channel and combine it with rapid predictive analytics that self- adjust based on the systems ability to mimic cognitive functions such as learning and problem solving.  The benefits are twofold. AI uses rapid predictive analytics that self- adjust near real-time which frees up resources to dedicate to other value- added activities.  Through AI you eliminate the learning curve that typically occurs each time a person is new to a role which allows continuity and consistency across the network. In closing, the use of AI technology will accelerate in both the manufacturing and retail sector due to the increased complexities of networks, consumer expectations and shortages in human capital.

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