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    Blog Image

    How AI is Reshaping the Future of Supply Chains

    • Amid constant supply chain disruptions, AI enables data-driven decision-making and automation across operations.
    • Demand forecasting, risk mitigation, and supplier management benefit the most from AI implementation.
    • AI empowers supply chains with real-time analytics and automated problem-solving capabilities.

    July 19, 2024 | Supply Chain Software

    Since 2020, global supply chains have witnessed sudden and near-permanent changes because of the pandemic, economic turbulence and geopolitical conflicts.

    Not surprisingly, many businesses have accelerated digital transformation by deploying advanced supply chain technology — technology that is AI-powered and can break down complex datasets to present actionable information.

    Their digitization efforts have picked up pace with the advent of generative AI platforms that have democratized the use of AI.

    The popular opinion today across industries is that AI is no longer an abstract concept but an accessible, practical tool. This tool can simplify several tasks that, when done traditionally, consumed a lot of time and resources in the past. And its use cases are spread across various stages of the supply chain.

    For supply chain professionals, the question now is: Where can AI make the biggest impact in operations?

    What Does the AI-Powered Future of Supply Chains Look Like?

    With the deployment of AI-powered tools, supply chains are becoming more intelligent, automated and data-driven. Most of the decision-making is based on data collated from multiple sources and stakeholders.

    This also means that most functions in the supply chain can do more with less. The workforce can now play a supervisory role, validate technology-generated insights and use these to optimize processes.

    But while AI can transform end-to-end supply chain operations, it can make a more significant impact on some functions.

    Here are the top three functional areas where AI is making a huge impact.

    1. Demand Forecasting:

    In a fast-changing business landscape, businesses cannot rely merely on their historical sales data to estimate demand. With multiple factors impacting demand, they need a holistic viewpoint that can bring together internal as well as external data and detect patterns. AI-powered supply chain software unifies all internal and external data in a data lake. It also integrates a warehouse management system with other supply chain systems, enabling a business to access real-time data, match vendor demand data and replenish materials quickly. Such a system enables supply chain managers to look beyond macro-level forecasts and forecast demand at a granular level.

    2. Risk Mitigation:

    The predictive capabilities of AI tools are expected to significantly benefit supply chain management, setting a new precedent in proactive planning and risk management. AI can help companies study multiple variables, including financial, geopolitical and trade route risk data, as well as early warnings to help them understand risks and prepare mitigation plans, according to a GEP white paper. In this way, the entire approach in supply chain management changes from reactive to proactive, with insights derived from real-time data and market events.

    3. Supplier Relationship Management:

    The adoption of AI and digital tools is expected to make a huge impact on supplier relationship management. By bringing together data generated from multiple source systems and breaking it down to derive useful insights, it can unlock the next level of value in supply relationship management systems, says Scott Goodfellow, senior manager of consulting at GEP. It can also improve data quality with rigorous and proactive master data management. Ready access to clean data can help teams avoid costly errors born out of data inaccuracies and duplication. In addition to long-term relationship management, AI can simplify regular monitoring of supplier performance with a comprehensive set of user-friendly tools.

    In addition to the abovementioned use cases, supply chain professionals can leverage AI in many other processes including planning, inventory management and logistics.

    Generative AI can further simplify supply chain operations that require problem-solving and information synthesis. Among several use cases, it can identify issues within the supply chain by analyzing data related to geopolitical events, natural disasters, supplier disruptions or market fluctuations. It can also act as a virtual assistant for supply chain professionals, providing real-time guidance and answering routine queries.

    AI Can Provide Competitive Advantage

    To stay competitive, organizations need to evaluate and implement AI solutions quickly. They can no longer continue to watch on the sidelines as any delay can mean losing out to competition.

    Overall, businesses now have an opportunity to optimize and de-risk supply chain operations by accessing real-time, intelligent and actionable information. They can begin by deploying technology in functional areas that need a quick and major overhaul. They also need to upskill their workforce to succeed in this transformation.

    Transform your supply chain with AI-powered GEP NEXXE software.

     

    Tags: AI , Gen AI

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