AI Technologies Enhancing Supply Chain Management

Written By Abdul Kareem Mohamed Yasin, MSIPMM

AI Technologies Enhancing Supply Chain Management

Written By Abdul Kareem Mohamed Yasin, MSIPMM

by Abdul Kareem Mohamed Yasin, MSIPMM

Artificial intelligence (AI), which supports the delivery of timely and accurate information, tops the list of promising technology areas for the supply chain. Technology innovation allows organization to streamline the supply chain, increase agility and visibility, control inventory more efficiently, and reduce inventory costs.

Organizations need to be concerned with how to get helpful information into the supply chain. Technology enhancement has grown beyond just supply chain management software. The reality of resource limitations, though, mean that, to win, electronics OEMs need to invest in the most helpful technologies, picking and choosing the ones that offer the best business advantage. That’s a challenging task in a marketplace that is increasingly rife with choices. In the end, all of these increase customer satisfaction and boost brand loyalty.

Supply chain area

Picture extracted from Rahul Chatterjee (2016)

Enhancing Productivity and Profits

The Understanding these two categories of AI capacities is important for future implementation of AI into business work tools. Imagine if a business could automate such tasks that are (more or less) ‘wasting time’.

“Businesses estimate they spend on average per week around 55 hours doing manual, paper-based processes and checks; 39 hours chasing invoice exceptions, discrepancies and errors and 23 hours responding to supplier inquiries” (mhlnews.com 2017). Previous studies, by the Tungsten Network, have suggested that valuable time and money is wasted on trivial supply chain related-tasks that are conducted operationally by humans.

Enhancing Productivity and Profits

Picture extracted from Kate Patrick (2018)

This loss has been equated to around 6500 hours, during the work year, that businesses are throwing away by processing papers, fixing purchase orders and replying to suppliers. Companies, even at that enterprise level, have already begun the implementation of AI tech into everyday supply chain tasks.

In particular, the application of AI into Supply Chain related-tasks holds high potential for boosting top-line and bottom-line value. Tech vendors such as IBM, Google, and Amazon have released products that utilize artificial intelligence.

How can AI enhance the SCM?

1. Chatbots for Operational Procurement
2. Machine Learning (ML) for Supply Chain Planning (SCP)
3. Machine Learning for Warehouse Management
4. Autonomous Vehicles for Logistics and Shipping
5. Natural Language Processing (NLP) for Data Cleansing and Building Data Robustness

Chatbots for Operational Procurement

Streamlining procurement related tasks through the automation and augmentation of Chabot capability requires access to robust and intelligent data sets, in which, the ‘procurebot’ would be able to access as a frame of reference, or it’s ‘brains’.

Chatbots for Operational Procurement

Picture extracted from Kodiak Community (2017)

As for daily tasks, chatbots could be utilized to:

• Speak to suppliers during trivial conversations.
• Set and send actions to suppliers regarding governance and compliance materials.
• Place purchasing requests.
• Research and answer internal questions regarding procurement functionalities or a supplier/supplier set.
• Receiving/filing/documentation of invoices and payments/order requests.

Machine Learning (ML) for Supply Chain Planning (SCP)

Supply chain planning is a crucial activity within SCM strategy. Having intelligent work tools for building concrete plans is a must in today’s business world.

ML, applied within SCP could help with forecasting within inventory, demand and supply. If applied correctly through SCM work tools, ML could revolutionize the agility and optimization of supply chain decision-making.

By utilizing ML technology, SCM professionals would be giving best possible scenarios based upon intelligent algorithms and machine-to-machine analysis of big data sets. This kind of capability could optimize the delivery of goods while balancing supply and demand, and wouldn’t require human analysis, but rather action setting for parameters of success.

Picture extracted from Cristina Conti (2017)

Machine Learning for Warehouse Management

Taking a closer look at the domain of SCP, its success is heavily reliant on proper warehouse and inventory-based management. Regardless of demand forecasting, supply flaws (overstocking or under-stocking) can be a disaster for just about any consumer-based company/retailer.

Machine Learning for Warehouse Management

Picture extracted from Steve Banker (2017)

“A forecasting engine with machine learning, just keeps looking to see which combinations of algorithms and data streams have the most predictive power for the different forecasting hierarchies” (forbes.com 2017).ML provides an endless loop of forecasting, which bears a constantly self-improving output. This kind of capabilities could reshape warehouse management as we know today.

AI Warehouse Management

Picture extracted from Praveen Sharma (2018)

Autonomous Vehicles for Logistics and Shipping

Intelligence in logistics and shipping has become a center-stage kind of focus within supply chain management in the recent years. Faster and more accurate shipping reduces lead times and transportation expenses, adds elements of environmental friendly operations, reduces labour costs, and — most important of all — widens the gap between competitors.

Autonomous Vehicles for Logistics and Shipping

Picture extracted from Charles Pauka (2017)

If autonomous vehicles were developed to the potential, the impact on logistics optimization would be astronomical. “Where drivers are restricted by law from driving more than 11 hours per day without taking an 8-hour break, a driverless truck can drive nearly 24 hours per day. That means the technology would effectively double the output of the U.S. transportation network at 25 percent of the cost” (techcrunch.com 2016).

Natural Language Processing (NLP) for Data Cleansing and Building Data Robustness

NLP is an element of AI and Machine Learning, which has staggering potential for deciphering large amounts of foreign language data in a streamlined manner.

NLP, applied through the correct work took, could build data sets regarding suppliers, and decipher untapped information, due to language barrier. From a CSR or Sustainability & Governance perspective, NLP technology could streamline auditing and compliance actions previously unable because of existing language barriers between buyer-supplier bodies.

Conclusion

As you can see, laying the proper groundwork for AI pays huge dividends. There’s no doubt that AI offers even greater promise in the future, but, as these results show, there are significant benefits and dramatic results waiting for companies that focus on the fundamentals and put AI to use today.

The beauty of AI-based solutions is that they learn and drive continuous improvement over time. They get more precise and sophisticated as they gather more data and more experience. With the right AI solution in place, you can outpace your competitors today, and be well positioned for reaping even bigger rewards of AI’s promise tomorrow.


References

Charles Pauka. (2017). “Autonomous vehicles not the cure-all for congestion” retrieved from https://www.tandlnews.com.au/2017/12/07/article/autonomous-vehicles-not-cure-congestion/, accessed on 25/05/2018.

Chris Middleton. (2018). “80 percent of organisations set to invest in AI, claims report” Retrieved from https://internetofbusiness.com/80-percent-of-organisations-set-to-invest-in-ai-claims-report/, accessed on 10/06/2018.

Cristina Conti. (2017). “Oh man! Is my machine learning or am I learning from my machine?” retrieved from http://biblogg.no/2017/06/14/oh-man-is-my-machine-learning-or-am-i-learning-from-my-machine/, accessed on 06/05/2018.

Greg Brady. (2017). “8 Fundamentals for Achieving AI Success in the Supply Chain” retrieved from http://www.scmr.com/article/8_fundamentals_for_achieving_ai_success_in_the_supply_chain, accessed on 10/06/2018.

Hailey Lynne McKeefry. (2017). “6 Artificial Intelligence Technologies Enhancing Supply Chain Management” Retrieved from https://www.ebnonline.com/author.asp?section_id=3219&doc_id=283133, accessed on 06/06/2018.

Kate Patrick. (2018). “3 ways AI will upend logistics” retrieved from https://www.supplychaindive.com/news/artificial-intelligence-disrupt-logistics/521655/, accessed on 18/05/2018.

Kodiak Community. (2017). “6 Applications of Artificial Intelligence for your Supply Chain” Retrieved from https://medium.com/@KodiakRating/6-applications-of-artificial-intelligence-for-your-supply-chain-b82e1e7400c8, accessed on 11/06/2018.

Praveen Sharma. (2018). “The Role of Artificial Intelligence (AI) in Logistics” retrieved from https://www.shiprocket.in/blog/artificial-intelligence-role-in-logistics/, accessed on 06/05/2018.

Rahul Chatterjee. (2016).” What is a digital supply chain?” retrieved from https://www.quora.com/What-is-a-digital-supply-chain, accessed 25/06/2018.

Steve Banker. (2017). “The Arms Race To Leverage Machine Learning In Supply Chain Planning” retrieved from https://www.forbes.com/sites/stevebanker/2017/10/16/the-arms-race-to-leverage-machine-learning-in-supply-chain-planning/#230d63e16807, accessed on 25/05/2018.

Surendran. MSIPMM (2017). “Adopting New Technologies for Effective Warehousing”. Retrieved from https://sipmm.edu.sg/adopting-new-technologies-effective-warehousing, accessed on 10/06/2018.

About the Author Abdul Kareem Mohamed Yasin has substantial experience in the areas of international trade, and in recent years specifically in the field of supply chain management & customs compliance. He holds a Bachelor degree in Biochemistry and is a qualified member of the Singapore Institute of Purchasing and Materials Management (MSIPMM). He completed the Graduate Diploma in Supply Chain Management (GDSCM) course on July 2018 at SIPMM Academy.

Top