5 Ways AI Helps Solve the Supply Chain Puzzle

Any supply chain professional will tell you that supply chain management is a dynamic challenge. Everything is always in flux, and you are dealing with ever-changing situations and variables. Artificial Intelligence (AI) is playing a growing part in solving the puzzle of supply chain management and logistics. The following are five benefits of the use of AI in this field.

1. Greater Intelligence

Across the supply chain, AI algorithms can recognize patterns of demand for products across geographic markets, socioeconomic segments, and time. Algorithms can also account for macroeconomic cycles, political developments, and even weather patterns. These projections of market demand can drive raw material sourcing, inventory, equipment maintenance, energy consumption, financing decisions, and human staffing.

2. Better Supplier Selection

Risks related to suppliers are a significant headache for logistics professionals. Just one error by a supplier can significantly damage a company’s customer service reputation. Using AI for manufacturing supply chains can cut down on these risks by analyzing supplier data such as full-delivery-on-time performance, credit scores, and other supplier evaluations. AI can help to optimize the choice of suppliers and bring about greater effectiveness in supplier relationship management.

3. Improved Production Planning

With the use of AI and Machine Learning, companies now enjoy enhanced insights for production planning and factory scheduling accuracy. This works especially well for build-to-order producers. Through the use of AI technology, businesses reduce supply chain delays for parts of all types. AI has the ability to predict the volume of future demand and optimize the availability of critical parts to ensure continuous production.

4. Superior Warehouse Management

AI technologies can track and measure all factors that go into forecasting accurate demand. In fact, the wonder of AI can provide an endless loop of prediction that continuously adjusts the forecast based on such factors as real-time sales, the weather, and more. All of this information can transform warehouse management along with self-driving forklifts, automated sorting, and self-managing inventory systems. Amazon’s highly automated distribution centers are excellent examples of the use of AI.

5. Easier Compliance

Buying organizations mandate that vendors comply with certain supply chain rules in order to ensure coordinated processes, maintain consistency in order fulfillment and delivery timelines, and avoid supply chain failures. For suppliers, these business rules present a big management challenge given that each buying organization might have many unique business requirements. Using AI capabilities, compliance with these business rules is becoming easier for suppliers to manage.

Prepare for the AI Future

The rapid rate of increase in supply-chain globalization means ever more complexity in supply chains. Therefore, there will more than likely be strong and continued growth in AI technology driving increasingly advanced solutions to supply chain management problems. Companies that fail to keep pace will technology will ultimately be unable to compete. From predictive maintenance to automated shipping standards, AI is changing the game for effective supply chain management.

Community