Is AI the intelligent decision for supply chain management?


Managers need access to data about their supply chain to make the best decisions, but the constraints of legacy technologies can thwart the goal of end-to-end transparency. But, those days will be behind us. New technologies which have the capability to take over supply chain management entirely are disrupting traditional methods of working. Within years, the supply chain function may be obsolete, replaced by a running utility that optimally manages finishing work flows and requires little human intervention.

With a digital base in place, businesses can capture, analyze, integrate, easily access, and interpret high quality, real-time data – data that fuels process automation, predictive analytics, artificial intelligence, and robotics, the technologies which will soon take over supply chain management.

Leading companies are already exploring the possibilities. Several have used robotics or artificial intelligence to digitize and automate processes and repetitive tasks like invoicing, purchasing, accounts payable, and parts of customer support. Analytics are currently helping companies improve demand forecasting, so that they can reduce or better manage volatility, improve asset utilization, and supply customer convenience at optimized cost.

Sensor data on maintenance and machine use are currently helping some producers so downtime is minimized. Blockchains are beginning to reevaluate how parties collaborate in flexible supply networks. Delivery drones and vehicles are not far off. Rio Tinto, the global mining-and-metals company, is exploring how digital technologies can automate mine-to-port operations. Using autonomous operators trains, cameras, lasers, and tracking sensors, the firm will be able to manage the supply chain reducing the need for workers in remote locations and remotely – while enhancing safety, by avoiding things such as factory fires caused by smoke alarm malfunctions and work site injuries related to improper racking.

For a number of top retail companies’ control systems have been the nerve centre of their operations. A typical"tower" is actually a physical room staffed with a team of data analysts that works fulltime, 24/7, monitoring a wall of high definition screens. The screens give 3D graphics and info on each step along the supply chain, from order to delivery. Alerts warn of process bottlenecks or inventory shortfalls before they happen, so that groups on the front line can track correct quickly before possible problems become real ones. Unquestioned accuracy real-time data customer focus, process excellence, and leadership that is analytical underlie these operations’ control tower operations.

Industrial organizations are also embracing the idea. 1 manufacturer network moves parts per day and more than a million parts. Supply problems are flagged by the control tower , and as they calculates the effects of the issue arise automatically corrects the issue using pre-determined flags or actions it for the escalation team. A steel company built a customized tool into its control tower system which increases supply chain responsiveness and durability.

The tendency is clear: Technology is doing a much better job – and is currently replacing people in supply chain management. But when planning, purchasing, production, order fulfillment, and logistics are largely automated, what’s left for supply chain professionals?

In the short term, supply chain executives will need to shift their focus from managing people doing mostly repetitive and transactional tasks, to designing and managing information and material flows with a limited set of highly specialized employees. In the near term, supply chain analysts that can analyze data, structure and validate data sets, use digital tools and algorithms, and forecast effectively will be in high demand.

A handful of specialists will be necessary to design a supply chain engine that supports priorities of the company, requirements, and the plan. A small number of people must be recruited or trained in new skills in the intersection of technology and operations to keep that engine running. Since the skills required for these new roles aren’t easily available now, the biggest challenge for companies will be to create a supply chain vision for the future – and a strategy for filling critical roles.

The death of supply chain management as we know it is on the horizon. Today, companies and the managers working to upgrade their skills and processes are the people who will come out on top.