The Growing Role of AI in Supply Chain Management

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Editor’s Note: Today’s blog comes from a guest writer, Luke Smith, who speaks about the growing role of AI in supply chain management. 

In today’s world, it isn’t really all that hard to imagine how technology is going to continue to change our lives. What’s probably harder is imagining going back to a time before technology and trying to imagine yourself adjusting to that lifestyle. For many of us, not only is it hard to imagine, but it doesn’t sound all that appealing.

Advances in technology are all around us — probably more so than many of us even realize. For instance, take a long hard look at the clothing you’re wearing. How many steps happened to get it to you? How much technology do you think was involved in the process? Could artificial intelligence have been involved?

The Supply Chain Trends to Know in 2020

It may come as somewhat of a surprise to learn that the answer to the last question is probably a resounding yes. Artificial intelligence (AI) is growing in popularity in nearly every industry for all sorts of functions. In fact, the supply chain in general is currently undergoing a huge adjustment to adapt to the tech.

How Can AI Help?

Those who are steeped in technology know that the broad term artificial intelligence can mean a lot of different things. But for many of us, it is sufficient to understand that AI is a realm of computer science where machines are designed to work and respond to human situations, albeit in a much more accurate and often faster way. The industry surrounding AI is flourishing and all sorts of new uses and inventions are being developed every single day.

Take, for example, marketing. Artificial intelligence in marketing can be used in conjunction with big data to collect and interpret the demographic information and shopping preferences of a given population. This information can then in turn be used to determine which marketing strategies are working the best, which products could benefit from a markdown/up, and how to target more people to get them in the door.

There are a number of industries that are ripe for an AI transformation. Manufacturing — one of the most basic building blocks of a supply chain — is just one example. AI has been touted as a means of improving workplace safety and boosting efficiencies by doing over twice the work in half the time. However, as many blue-collar workers have noticed, there is a human job cost to automating many of these products.  

Information and Transportation Management

Perhaps the most significant way that AI is currently impacting the world’s supply chain, however, is through information and transportation management. A powerful means of using AI is by tracking products as they leave one facility and move to another. There can literally be hundreds of millions of pieces of information to keep track of, and AI can do it relatively seamlessly.

This adaptation has made the supply chain more holistic. Rather than having a bunch of different departments that handled a product in a specific way, now everything seems much more interconnected and able to communicate. In the modern, globalized world, one small hiccup in the supply chain early on can have lasting repercussions — but connectedness may allow easier adjustments.

Using AI, not only do supply chain managers have access to millions of records of data at their fingertips, but they have the confidence in knowing that overall it is clean. Artificial intelligence allows managers to use this information in a predictive way as well. For instance, if markets are flooded with a certain product, they can see this trend earlier and shift production away from that to something else.

Economic Implications

Make no mistake, there are a number of very profound economic implications that go along with the advent of technology. For many businesses, perhaps the biggest change is the ability to get more accurate information more quickly and safely. Ultimately, this means bigger and bigger profit margins; what is there to dislike?

Of course, all of these boosts in efficiency can mean a number of things for the employees that used to be doing these jobs. For many, it means trying to find something else to do for work altogether. It is estimated that nearly ⅓ of all businesses are currently implementing some form of AI in the operations. Another way to look at it is that technology will replace nearly 30 million manufacturing jobs alone by 2030

Although AI can sound like a great idea, there is a steep ladder to moving your company in that direction. For one, it is expensive to get set up and it requires employees with the technical knowledge to run it. In the U.S. especially, there is a substantial skills gap between where the technology is taking us and the people that understand it enough to use it and to catch errors that AI could still make.

The Big Picture for AI in Supply Chain Management

The use of AI in supply chain management isn’t going anywhere, and in general it has a profound positive impact on many of our lives. The tech is likely to continue to become more and more intertwined into our day to day activities. Of course, as with any major change, there are many costs and benefits that need to be weighed in advance.

In January 2020, Cerasis was acquired by GlobalTranz, a leading technology and multimodal 3PL solutions provider. To learn more, please read the press release. If you are a current or prospective Cerasis customer, we invite you to reach out to us to learn how our combined capabilities can deliver new services, solutions and enhanced value to your supply chain. To learn more about GlobalTranz, please visit www.globaltranz.com.

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