AI to the rescue!
Introduction
Everything can be solved by Artificial Intelligence (AI)! That is what people want to make you believe. AI to answer questions, AI to create images, AI to present possible solutions given specific circumstances, AI to write e-mails. The promise of AI to support us as humans, as workers is enormous and can help to be more efficient and effective. Do more with less.
But given the current state of AI, what can supply chain professionals expect? Is there a future for AI in supply chain or do we still need human knowledge and expertise, minimising the importance of AI? In this blog we will dive deeper into the use of AI with regards to the domain of supply chain.
What is the potential of AI?
The potential for AI in supply chain (and any other type of business) is huge. To replace non-value added activities, to free up time for analytics, to do more with less, to be able to respond even faster to events, to make better informed decisions. to…you get the message. With the current state of the world, supply chains and labour force, the need to respond fast, be agile, resilient is a must.
Is there potential for AI in supply chain? As mentioned in previous blog posts, not much innovation has happened the last 30 years in supply chain management. Supply chain processes are more or less the same compared to last century as well as the use of planning software. Legacy systems are installed and still used at many companies, Excel-based planning is present in all companies and new planning solutions are challenging the status quo.
But there is a change! For example, there is more data available, internal as well as external data from different sources that can be incorporated into the decision making process of supply chain. Think of marketing data, social economic data, weather forecasts. Legacy systems have problems incorporating these data sets, let alone make use of it. Another change is the rise of new planning platforms (like Pigment). based on the latest technology, these platforms can cope with large data sets, internal and external data and have imbedded AI functionality.
AI in supply chains
AI can bring added value. There are several areas where AI can play an important role to support the decision making processes in supply chain. Think of:
- (Master) Data Management: improve the data quality to be used in the planning processes.
- Forecasting: use Machine Learning (ML) algorithms to improve the forecast accuracy.
- Responsiveness: with the support of generative AI, planners can respond faster to events.
- Decision making: AI agents can generate 2 to 3 plans based on the given planning parameters and constraints from which the planner can make a final decision.
- Scenario planning: AI can generate several scenarios based on (external) data sets, assumptions and planning parameters and constraints.
Supply chain processes did not change much, but technology is making big leaps forward these days. With these new technical capabilities, planning efficiency and effectiveness can be improved. With the use of the right technology, we actually can do more with less. And with the aging workforce and the increased uncertainty in supply chains, that is a much needed improvement.
‘Day in the life of’ with AI
How do we envision the future way of working for supply chain professionals? When a planner walks into the office, he or she already received the latest information based on specific KPIs and set thresholds. Topics that need attention of the planner are listed. In the meantime, AI agents scraped the web for business relevant topics, loaded the latest data set from operational systems (ERP, CRM) and forecasted the new demand, generated a supply plan and created early warning signals.
Based on these current set of parameters, the planner can choose between 2 to 3 plans (scenarios) to implement, where the effect of each plan is visualised in comprehensive dashboards. Easy to interpret, quick to spot upcoming challenges.
This whole process is fully automated and reports are automatically generated when new events happen. The planner can spend his or her time on the most value added activities: making informed decisions and implement the plan of choice. With the use of new technology (AI, automation), the shift from the current way of working (labour intense, spent on a lot of non-value added activities, error prone) can be made to the described situation as above.
Conclusion
We see that Pigment invests a lot in AI functionality. This year, Pigment will release new AI functionality that supports different AI agents. Specific AI functionality aimed to solve specific issues, like demand planning, supply planning. And we do see that more and more supply chain professionals are requesting this type of functionality.
Currently they are using legacy systems, where the integration of AI is non-existing or is an addition on top of the old architecture and, therefor, not an ideal integration and user experience. In discussion with customers, we do see the change of requested functionality to move into improved efficiency and effectiveness.
Supply chain professionals are looking for tools that can decrease the workload, improve the speed and quality of decision making and allow for scenario planning. And that future has arrived in our opinion. The planning platforms that can deliver the requested functionality are out there and ready to be used.
If you want to see AI in action in the planning platform Pigment, give us a call. I guarantee you will be surprised with the current capabilities of Pigment and how well that can support your planning process! We can be reached at jan.veerman@planadigm.com or at +316 5188 4701.
By the way: this blog post was not generated using AI.
