How AI is Transforming Supply Chain Management
Supply Chain Management (SCM) is a vital component of business operations that many companies invest in. It encompasses everything needed to get a product or service from the supplier to the consumer from raw resource extraction to manufacturing and distribution, making it crucial for most businesses and industries.
Over time, developed nations have created a global economic system that is fueled by SCM and logistics. This has led to an increase in trade routes around the world as shipment vessels populate both land and sea, even with drones being used now to deliver goods.
With so much data being transferred around by these supply lines, it’s become necessary for businesses to introduce AI-powered tools to manage an abundance of incoming information so that it can be used to optimize logistics around the world using Deep Learning.
Understanding AI in Supply Chain Management
Artificial Intelligence (AI) is playing an increasingly critical role in SCM due to the large scale of global trade. By incorporating Machine Learning, businesses are able to calculate nuanced data gathered from weather patterns and seasonal trends that help optimize shipping routes and storage conditions for improved efficiency.
There are many ways that AI is benefiting Supply Chain Management:
Inventory Management: Using Predictive Algorithms, AI models can determine future forecasts on trends and market conditions to help influence optimized inventory and reduce the risk of over or under-stocking goods.
Automated Warehouse Management Systems: Robotics can reduce the need for manual labor, taking over more strenuous and mundane tasks. Cobots can be used to assist with transporting items across large complexes too.
Logistics and Delivery: AI can optimize delivery routes by analyzing traffic conditions and comparing them to parcel volume and the delivery location, finding the fastest routes that help cut down on fuel costs and maintenance.
Demand Forecasting: Algorithms can help predict seasonal surges for certain products like Christmas and Halloween-related decorations. This can help businesses properly stock for changes in supply and demand.
Benefits of Using AI in Supply Chain Management
Without a doubt, the biggest benefit created by AI-powered supply chain management is the overall increase in efficiency. AI can help streamline warehouse operations, automating procedures and robots for faster order fulfillment.
This creates a cost reduction, especially on the overhead as fewer laborers are needed, giving workers more time to focus on other, more pressing tasks that can speed up deliveries and create higher customer satisfaction.
Case Studies of AI in Supply Chain Management
AI implementation is already being observed widely across many of the world’s largest logistics facilities. Amazon, for example, is the world’s largest e-commerce store, Amazon supplies a majority of North Americans with goods. For them to effectively manage massive warehouses distributed across the United States, cobots are required to help transport goods through facilities for shipping.
It’s not just the world’s largest companies using AI to power their supply chain management either. Smaller companies like Stitch Fit are using machine-learning algorithms to help pair individuals with unique styles that are shipped by the company, resulting in complex manifests that Deep Learning algorithms are primed to solve.
The Future of AI in Supply Chain Management
Despite challenges created by the Covid-19 pandemic, supply chain management is in a prime spot for innovation as technology continues to develop. Advancements in internet-of-things and blockchain technology can help establish a more robust network for cobots and other machines to operate on with transparent recording keeping that is crucial for logistic operations.
Despite the benefits, there is still a major concern that increased AI automation in SCM will phase out the need for human workers, resulting in unbalanced job displacement for large demographics around the world.
To prevent this, warehouse facilities and logistic corporations might be required to develop new roles and responsibilities for workers that are within their range of skills to replace work being taken by machines.
