GUEST COMMENT AI is essential to supply chain transformation

In our connected and digital world, using artificial intelligence (AI) across the supply chain enables companies to maximise productivity by reducing uncertainties. It also helps to speed up decision-making, reduce cycle times and contribute to continuous improvement. By increasing the expectations of improved efficiencies between suppliers and customers it highlights the need to use the capabilities of AI wherever possible across the entire supply chain.

The use of AI is helping to deliver some of the most powerful optimisations required for accurate capacity planning, improved productivity, higher quality and lower costs – all whilst creating safer working conditions. The Covid-19 pandemic had a devastating impact on companies and showed just what effect global events can have on the supply chain, highlighting that companies need to invest more and plan more effectively to deal with any future uncertainties.

Jean-Baptiste Clouard, CEO at Flowlity, an AI-based supply chain planning and forecasting solution, highlights the benefits for businesses using AI, as well as the challenges businesses face, and why ultimately, it is essential to transform the future of supply chains.

Four benefits of using AI in supply chains

Accurate Inventory Planning
When companies can manage and plan their inventory, it can ensure accurate flow of items in and out of a warehouse. Supply chain management considers the different variables such as order processing, and the time taken to pick and pack any orders – which can be time-consuming. Inventory planning will prevent any overstocking or unexpected stock-outs.

A more efficient warehouse
An efficient warehouse is integral to the supply chain, as it supports a smooth product journey from component parts to the warehouse and all the way to the customer. By using an AI system, it can solve issues quickly and accurately while simplifying the processes and speeding up the work. It will save time by freeing up capacity in the warehouse which can in turn allow staff to better use the time to upskill.

Reduce operational costs
The reduction of operational costs is one of the best benefits from using AI in the supply chain for many companies. Automated intelligence operations offer longer periods of error-free time by reducing workplace errors, and incidents.

On-time delivery
AI systems can reduce any dependency on manual inputs and make delivery times faster, safer, and smarter. Smarter systems can help facilitate timely deliveries to customers and automation will support traditional warehouse systems to remove any potential bottlenecks.

As with all new systems and processes, the introduction of a new way of working can present a variety of challenges across many different areas of the business. But by understanding the challenges that might be faced, supply chain leaders can address them.

Most AI and cloud-based systems are very scalable – meaning that no matter how much a business grows, supply chain executives always have the systems to support it. What is worth knowing at the start of the process is how it can be difficult to assess the initial number of users and systems that might be needed across a business to make any new investments have an impact and be effective. Before supply chain managers start looking for a new system, it is important to realise that all systems are unique, and requirements must be discussed to ensure the right one is chosen.

Whether it be the costs of training, or the operational costs involved, with any new system, there is a requirement for investment – both in terms of time and money. Good supply chain business partners will have a thorough onboarding process, and a rigorous training program to ensure everyone is aware of what they need to do. AI systems are usually cloud-based and can require a lot of processing power and bandwidth. Specialised hardware may also be required, and it takes time to gather data and build working algorithms. But initial investments must be offset by potential long-term savings.

Investments in smart technology and the use of AI, can capture huge amounts of data that was previously disaggregated. Supply chain managers need to be able to cut through the sheer volume of real time data that is available, make decisions and be able to identify where any potential bottlenecks occur.

Recent studies have suggested that AI can deliver value throughout the supply chain and logistics operations. Everything from reducing operational redundancies, risk mitigation and cost savings, to enhancing forecasting and reducing the time for delivery through a more optimised route, AI in the supply chain is preferred by manufacturers and retailers across Europe and the UK.

Jean-Baptiste Clouard, CEO at Flowlity.