AI is essential for supply chain transformation

In our connected and digital world, the use of artificial intelligence (AI) throughout the supply chain enables companies to maximize productivity by reducing uncertainty. It also helps speed up decision-making, reduce turnaround times, and contribute to continuous improvement. By raising expectations for improved efficiency between suppliers and customers, it underscores the need to leverage the capabilities of AI wherever possible throughout the supply chain.

The use of AI helps deliver some of the most powerful optimizations needed for accurate capacity planning, improved productivity, higher quality and lower costs – all while creating safer working conditions. The COVID-19 pandemic has had a devastating impact on businesses, demonstrating the impact global events can have on the supply chain and highlighting the need for businesses to invest more and plan more effectively to deal with future uncertainties.

Here, Jean-Baptiste Clouard, CEO at fluidityan innovative AI-based supply chain planning and forecasting solution, highlights the benefits for companies adopting AI, as well as the challenges companies face and why it is ultimately imperative to transform the future of supply chains.

Four advantages of using AI in supply chains

1. Accurate inventory planning

When companies can manage and plan their inventory, it can ensure the accurate flow of goods in and out of a warehouse. Supply chain management takes into account the various variables such as order fulfillment and the time it takes to pick and pack orders – which can be time consuming. Inventory planning prevents overstocks or unexpected shortages.

2: A more efficient warehouse

An efficient warehouse is an essential part of the supply chain as it supports a smooth product path from components, through the warehouse, to the customer. By using an AI system, problems can be solved quickly and accurately while simplifying processes and speeding up work. Time is saved by freeing up capacity in the warehouse, which in turn allows employees to better use the time for further training.

3: Reduce operating costs

Reducing operational costs is one of the biggest benefits of using AI in the supply chain for many companies. Automated information operations provide longer periods of error-free time by reducing workplace errors and incidents.

4: Timely delivery

AI systems can reduce reliance on manual input and make delivery times faster, safer, and smarter. Smarter systems can help facilitate on-time deliveries to customers, and automation will support traditional warehousing systems to eliminate potential bottlenecks.

variety of challenges

As with all new systems and processes, adopting a new way of working can bring a variety of challenges across many different areas of the organization. But when supply chain leaders understand the potential challenges, they can address them.

Most AI and cloud-based systems like Flowlity are highly scalable — meaning that no matter how much a business grows, supply chain leaders always have the systems in place to support it. At the beginning of the process, it’s important to realize that it can be difficult to estimate the initial number of users and systems that a company may need in order for new investments to have an impact and be effective. Before supply chain managers start looking for a new system, it is important to recognize that all systems are unique and the requirements must be discussed to ensure the right one is selected.

Whether training or operating costs, every new system requires investments – both in terms of time and money. Good supply chain business partners have a thorough onboarding process and a rigorous training program to ensure everyone knows what they need to do. AI systems are typically cloud-based and can require a lot of processing power and bandwidth. Special hardware may also be required, and it takes time to collect data and build working algorithms. But initial investments need to be balanced with potential long-term savings.

Investments in smart technology and the use of AI can capture vast amounts of data that have previously been disaggregated. Supply chain managers need to be able to drill through the sheer volume of real-time data available, make decisions and identify potential bottlenecks.

Recent studies have shown that artificial intelligence (AI) can add value throughout the supply chain and logistics operations. AI in the supply chain is favored by manufacturers and retailers across Europe and the UK, from reducing operational redundancies, risk mitigation and cost savings to improving forecasting and reducing delivery time through an optimized route.

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