Why AI is the Future of Supply Chain

There’s little doubt that AI and more advanced offshoots such as generative AI (Gen AI) and machine learning (ML) are enabling supply chain teams to streamline operations, improve decision-making and enhance productivity. 

But in truth, these are vague examples of how this game-changing technology is enhancing the supply chain landscape and can be applied to virtually any discipline or department in business. 

Here, Supply Chain Digital takes a look at just some of the specific use cases for AI in supply chain and runs the rule over the technology vendors leading the charge when it comes to ensuring organisations are making the most of the tools at their disposal. 

The benefits of AI in supply chain 

Enhanced supplier relationship management (SRM)

AI has the capacity to analyse supplier performance data to identify patterns and trends – thus enabling companies to select suppliers based on factors including quality, cost, reliability and their sustainability credentials. 

The result is often stronger, more trustworthy supplier relationships and, ultimately, a more resilient supply chain. 

Better demand forecasting

Sticking with the theme of data analysis, AI can be leveraged to examine sales records, market trends and external factors – such as weather patterns or economic indicators – to more accurately forecast demand. 

This leaves firms better positioned to plan for the future as they can anticipate customer needs and adjust inventory levels accordingly, reducing overstock and stockouts.

Improved inventory management

Tied in with forecasting and planning improvements, organisations can optimise inventory levels by predicting exactly when and where their products are needed most thanks to AI-driven analytics. 

Again, this meets customer needs and also reduces the carrying costs associated with excess inventory.

End-to-end visibility

One of the biggest plus points of AI’s integration is its ability to give companies end-to-end visibility of their supply chains, achieved by integrating data from multiple sources. 

As a result, firms can track goods in real time, manage inventory across multiple locations and, crucially, respond quickly to any disruptions.

Automation of routine tasks

It’s well documented that one reason so many major global players are investing heavily in AI is for its ability to automate repetitive tasks such as order processing, invoicing and inventory tracking.

This not only eliminates the prospect of human error and speeds up processes, but also frees up employees to focus on more strategic tasks that add value to operations.

Sustainability and environmental impact

An increasingly-discussed positive of AI is its ability to optimise the logistics element of operations by optimising routes and thus reducing fuel consumption and emissions output. 

It can also help companies track and manage their carbon footprint and adhere to environmental regulations, contributing to an all-round more sustainable supply chain. 

Predictive maintenance

An important benefit, AI is able to predict when equipment or other machinery is likely to fail, allowing companies to perform maintenance before a breakdown actually occurs.

This reduces downtime, maximising the amount of time operations can continue as normal, while potentially extending the lifespan of assets and lowering maintenance costs.

Personalisation and customer satisfaction

Personalisation is yet another huge plus. By harnessing the power of AI, firms can analyse customer data to provide specific recommendations and services.

This enhanced customer experience inevitably leads to higher levels of customer satisfaction and increased loyalty.

All-round supply chain optimisation

AI algorithms can analyse multiple variables including shipping costs, delivery times and production schedules.

This helps companies figure out the most efficient and cost-effective ways to move goods from suppliers to customers, representing all-round optimisation of the supply chain network.

Top AI in supply chain vendors

AWS Supply Chain

The supply chain arm of AWS continues to expand its AI capabilities in a bid to provide industry-leading, end-to-end visibility and insights.

With its Amazon Q offering, supply chain professionals can benefit from a Gen AI assistant which provides a summarised view of key risks around inventory levels and demand variability and visualises the tradeoffs between different possible scenarios. 

In a recent conversation with Supply Chain Digital, Diego Pantoja-Navajas, VP at AWS Supply Chain, said: “Thanks to the power of Gen AI, customers can ask Amazon Q in the AWS Supply Chain what is happening across their supply chains and receive intelligent, conversational answers to complex questions.”

C3.ai

C3.ai has created what it bills as the only generative AI platform built for the enterprise. 

C3 Generative AI sits on top of the firm’s proven AI solutions, which have already transformed the way dozens of complex businesses work. 

The wider C3 AI Supply Chain Suite offers an end-to-end family of predictive enterprise AI applications for supply chain planning and execution, enabling proactive management instead of reacting to past events.

SAP

SAP is harnessing the power of AI across its entire catalogue of supply chain solutions.

This includes integrating Gen AI tech with the SAP Ariba Category Management solution to help procurement professionals build comprehensive and effective category strategies at a faster pace.

SAP is also embedding Joule – its Gen AI copilot – throughout its cloud solutions, with availability in its spend management software in the pipeline. 

Coupa

Coupa’s AI-driven optimisation platform leaves clients well placed to outmanoeuvre disruptions, confidently balance trade-offs and multiply margins in their physical supply chains.

Key capabilities include the demand modeller, designed to increase the efficiency and accuracy of demand modelling, forecasting and planning. By combining internal and industry data while applying AI, companies can achieve richer context and enhanced demand predictions for the future. 

Meanwhile, the supply chain modeller uses AI to optimise wider networks, inventory and transportation routes. 

Microsoft

Microsoft has identified numerous ways Gen AI can be applied to key supply chain processes, introducing its Copilot technology across its ERP portfolio, including in Microsoft Dynamics 365 Finance, Dynamics 365 Project Operations and Dynamics 365 Supply Chain Management.

In March 2023, Microsoft announced Microsoft Dynamics 365 Copilot, introducing the world’s first AI copilot for ERP and CRM applications. With the next generation of AI capabilities in Dynamics 365 Copilot, high-touch, laborious processes can be transformed with interactive AI-powered assistance.

Kinaxis

AI is at the heart of Kinaxis’ newly-unveiled tool, Kinaxis Maestro – formerly known as RapidResponse.

Its AI-powered user experience boosts productivity by helping users quickly learn from documentation and best practices, allowing for faster onboarding and more efficient work.

Maestro also has the capacity to generate dashboards, scenarios and much more, making it simple for users to explore and interact with data in intuitive new ways.

Blue Yonder

Blue Yonder bridges Gen AI with deep supply chain domain knowledge, allowing firms to dynamically orchestrate their supply chains through AI-powered data synthesis and decision intelligence.

Blue Yonder Orchestrator, its groundbreaking Gen AI capability, fuels intelligent decision-making and accelerated supply chain orchestration. 

By combining large language models' natural language processing with companies’ supply chain intellectual property, the tool synthesises data-driven insights for smarter decisions. 

******

Check out the latest edition of Supply Chain Magazine and sign up to our global conference series – Procurement and Supply Chain LIVE 2024. 

******

Supply Chain Digital is a BizClik brand.