How artificial intelligence can help supply chain?
Artificial Intelligence and Machine Learning have already altered the dynamics of supply chains. They optimize operations, reduce prejudices and uncertainties, and improve productivity.
That is even more important in a context where supply chains are getting bigger and more complex. So, solutions based on artificial intelligence and machine learning are the perfect to face those problems.
Let’s go trough the benefits operations can get when applying AI technology on their supply chain.
Benefits of Artificial Intelligence for Supply Chain
Firstly, artificial intelligence can ensure a more organized warehouse and products flow. It can handle aspects such as order processing, packaging, prevent overstocking and stockout and increase accuracy.
That result may be achieved trough a good forecasting. Since the algorithms can reach at more accurate values for demand and supply, it becomes easier to organize inventory.
All of this while keeping operations safer. AI can analyze workplace and find safety problems, maintain registry of historical data. As established, keeping a safer workplace will also reduce costs.
Finally, artificial intelligence reduces manual labor, making process faster and freeing time on employees. That will also reduce errors during the process, since there’s less humans directly involved.
How Artificial Intelligence acts on operations
The way artificial intelligence acts is by collecting and analyzing data. From that analysis, it can give insights on operations and make decisions that will increase productivity.
So, there are two basic ways of analysis:
- Predictive: this analysis is based on historical data. It looks at the performance and external information to understand the process and predict outcomes.
- Prescriptive: you give the inputs necessary, and the algorithm will look for scenarios that are compatible with the needs.
Of course, those two works better together, you can have predictive and prescriptive analysis to maximize even more your results.
Difficulties of implementing an Artificial Intelligence for Supply Chain
Adapting your supply chain for an artificial intelligence environment is not something done without a lot of study and strategy. You’ll face a lot of challenges while developing your system, for instance:
- Algorithm’s Complexity: its usual the need for a specific hardware or system for AI to be implemented.
- The Size of the Project: each system has its own limitations, it’s not common for a project developed with certain specifications to work easily in other conditions.
- Training: artificial intelligence needs training to be accurate. So, you’ll need a lot of time and data to get to an optimal point.
- Operational Costs: the whole process of developing a system costs a lot and doesn’t have an immediate return.
Although the challenges exist, you can prepare your supply chain beforehand to receive the system, that’s what we’ll see next.
Getting ready
So, now that you know the challenges of implementing a AI system on your supply chain. You can start thinking of how do minimize those points, which means, how to prepare your operations.
Firstly, you need to know what can be accomplish within your limitations. Make tests and get results about your whole business and supply chain to know exactly what to expect and set realistic objectives.
Doing that, you’ll need to choose a couple of KPI’s that will guide your analysis and reveal the situation of your project. They will also be important to analyze the effects of the implementation later.
This will lead to a better knowledge of the technology used by the operation. But to make a better transition, it’s fundamental to see if your employees and professionals are prepared to work with AI.
Then, it’s a good moment to train them in the new technologies that will affect workplace, so you can operate in a better level when the implementation is complete and keep morale on the team.
Finally, you must access the greatest quantity of data you can. Of unstructured and structured data of the company and everything it conduct within the past years. That will facilitate the training and make results faster.
In sum
Supply Chain can benefit a lot from artificial intelligence and machine learning. With the right strategy and a good implementation and development, you’ll see better results, efficiency, and reduction of costs.
AI will provide you with information that can make your decisions much more assertive and accurate. But it’s fundamental that the technology is suitable for your corporate and team.
