Artificial Intelligence is no longer a distant concept; it's a tangible reality that's ripe for integration into every sector, including the supply chain. And as supply chain leaders, we stand at the precipice of an AI revolution that promises to transform our lives in ways previously unimaginable.
Yet despite advancements, there remains a wealth of untapped potential for technology to revolutionize supply chain operations, fundamentally altering both our day-to-day behaviors and our long-term ability to execute. Understanding the current capabilities of AI and proactively planning for the future is crucial to effectively leveraging the technology’s transformative power.
The Transformational Power of AI in Supply Chain
Just as the internet transformed the way we work, AI will yet again change our daily actions and expectations on how we operate. Imagine a future where instead of pulling a canned report, downloading it, manipulating it, then summarizing it and sending it out via email, all those tasks were completed with a single command.
Imagine you could ask a question that would often take hours or days of analysis by a person or even a team, answered instantaneously? For example, what is the impact of my current inventory distribution on parcel shipping costs if I maintain a 2-day shipping service?
Imagine you could not only have data instantly at your fingertips, but you could execute a change based on that data with a simple command? For example, based on my inventory distribution, reorder products so I can maintain current service level while also maintaining average shipping rates.
Such is the power of AI that will be unleashed in the near future. These fundamental capabilities can be utilized in any industry, but especially in the supply chain, where information is highly dynamic.
Until now, the difficulties achieving seamless data integration and visibility within the supply chain stem from its inherent physical nature, involvement of multiple parties with numerous handoffs, and the continued reliance on conventional communication methods such as paper documents, email, and phone calls.
We are seeing more and more that multiple forms of AI are being stitched together to solve these problems. Where ChatGPT, an LLM model, is great for interpreting and problem solving with natural language, we are seeing innovative leverage of LLMs with other forms of AI such as computer vision and machine learning to create end-to-end solutions for hard to solve problems.
Imagine you collect physical shipping documents but need to import the data into a system of record. AI can do this by scanning the documentation and auto-capturing the data in a structured format to store for access in the future.
Imagine you have an endless number of emails but need to find a particular reason why something showed up late. AI can supercharge your ability to find that information and provide trend analysis. Imagine you have to follow many custom contractual terms with your partners. AI can aid in adherence to these terms by retrieving all relevant data in the context of your workflow.
How Supply Chain Leaders Can Navigate the Revolution
Managing a supply chain is a dynamic endeavor that requires boots-on-the-ground physical operations, real-time tracking, and strategic planning for long-term investment decisions. AI has the potential to facilitate these diverse needs in the organization. Understanding the current strengths and capabilities of AI is key to identifying where best to deploy the technology as we undergo this transformation.
While the supply chain function continues to require increased tech integration, the traditional profile of a supply chain leader leans more towards operational expertise rather than technological proficiency. Therefore, it's essential to bridge this gap effectively to harness the full benefits of AI in supply chain management. Here’s a few steps you can take:
Anticipate the Wave
As a supply chain leader, you’re already responsible for monitoring operational performance. To get ahead with AI, you should also ensure you’re staying abreast of the emerging AI technologies, their power, and their potential to improve your business.
Finding credible sources of information, reaching out to technology folks in your network, and collaborating with other supply chain leaders interested in AI are all ways to remain ahead of its evolution. Understanding the current strengths and capabilities of AI today is as crucial as knowing its limitations and potential areas for quick improvement.
Ride the Wave
Once you’ve got a handle on what’s possible and beneficial for your organization, start testing the waters with off-the-shelf AI solutions. There are a few potential approaches to this that can be evaluated at the same time.
Point Solutions:
Find an off-the-shelf solution that can solve a particular workflow or manual task within your organization. This could be as simple as leveraging AI to automate document imports and create updates on shipments.
Bolt on Solutions:
Find a solution that integrates AI across multiple workflows on top of your existing technical infrastructure to create more end-to-end efficiencies. This could look like automating decisioning based on data points, such as allocating more ad spend based on channel performance or geographic reach.
Existing Software Vendors:
Work with your existing software vendors to understand what their AI roadmap looks like. If they lack an AI strategy or you don’t feel comfortable with their capability to innovate, it may be time to consider whether they’ll be able to support your future requirements. The integration of AI should dramatically change the way you interact with their software and become integrated within your daily workflow.
Catch the Next Wave
As with any new technology, there will be many software vendors claiming they can solve all your problems. However, many will fall short in terms of practical application or fail to effectively manage the physical nature of the supply chain management.
If you can’t find the perfect solution, don’t be discouraged. The technology is rapidly evolving, and those at the forefront are continually developing effective solutions. Looking for solutions purpose-built for the supply chain and being utilized by other supply chain operators is one way to weed out the noise.
Embracing AI in Supply Chain: The Next Set
As AI continues to revolutionize the supply chain industry, leaders must adapt and integrate these technologies to stay competitive. The AI revolution is not just about adopting new technologies but also about reimagining supply chain operations. By effectively harnessing AI, supply chain leaders can unlock new levels of efficiency, accuracy, and customer satisfaction, ensuring their businesses thrive in an increasingly digital world.
