The Rise and Rise of Digital Supply Chain
Sub Topic - How is the AI-powered supply chain seamlessly meeting the
complex demand requirements?
Feb 10, 2021 By Aurnob Banerjee
We can understand Digital Supply Chain by a simple term that it is basically a supply chain
that is driven by Web-Enabled capabilities. The key components of the digital supply chain
are properly integrated planning and execution, smart warehousing, digital supply chain
enablers, and prescriptive supply chain analytics. All these elements work together to make
the supply chain more agile, efficient, and customer-focused. The main goal of the digital
supply chain is to make a network that is responsive and resilient. Supply Chain works in the
traditional SCOR process which is the plan, make, source, make, deliver, return and deliver.
For this kind of digital supply chain, all of these factors need to work simultaneously.
One of the key factors which boost the agility of the supply chain is Artificial Intelligence. In
today’s world, it has been seen that Artificial Intelligence is the backbone of the supply chain.
It is the latest technology through which we can plan the end to end of all the structural
challenges that the customers, as well as the sellers, are facing. Artificial Intelligence helps in
increasing the speed of operations, speed in making decisions, it helps in continuous
improvement and reduces the no of cycle-times. Artificial Intelligence is booming in the
market and in the current market, it is valued at $700 million and it is expected to grow more
than $10 billion by 2025, with an annual growth of 45%.
There are numerous benefits of AI in the supply chain. The most vital of them are Warehouse
Efficiency as the warehouse is an integral part of the supply chain and doing the automation
with the help of AI can ensure timely retrieval of an item from a warehouse and it ensures a
smooth journey to the customer. The use of Artificial Intelligence can significantly reduce
warehouse Costs. Robots present in the warehouse provide greater speed and accuracy
through which we achieve higher levels of productivity.
Artificial Intelligence can help in accurate Inventory Management. As there are many
inventory-related variables like processing the order, picking and shipping the order which is
a tedious task and there is a high chance of error if done manually. In such a scenario, AIdriven tools come to be highly effective. These intelligent systems can provide us proper
analysis and can interpret a large number of datasets very effectively, which helps in
providing timely guidance on forecasting supply and demand. With the help of artificial
intelligence, we can eliminate the overstocking of unwanted inventory which will eventually
minimize the cost by analysing future customer demands and requirements. With the help of
automation, operations can work without any error for a long duration of time which will
reduce the incidents occurring at the workplace and the number of errors. This will also
reduce the bottlenecks along the value chain with the least efforts which will help in
achieving targets.
Most often, it was seen that supply chain managers often struggle to establish an end-to-end
process to manage a profitable supply chain network. By implementing Artificial Intelligence
managers can improve in how to take decisions by prediction and providing proper solutions
in order to make the scheduling of the production properly streamlined. If this need not be
done then there can be high variability due to the various dependencies present in
manufacturing and operations processes. Artificial Intelligence in the supply chain will help
us to get accurate predictions and we can also predict the outcomes that can come in all the
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different stages of the schedule which will help us to choose different alternatives whenever
there are any interruptions during execution.
With the help of cognitive predictions and recommendations, The AI-led supply chain can
optimize all the important decisions. AI-led supply chains help the manufacturers with all the
possible implications across all the scenarios in the terms of revenue, time, and cost.
The supply chain network is very complex that is present today, but it is very much critical
for the manufacturers to have clear visibility of the entire supply value chain, with the least
effort. If companies have a Cognitive AI-driven automated platform then they can use the
technology to reduce the bottlenecks and improve the pickup opportunities. All these can be
driven on a real-time basis and not by using historical data. It was seen that cognitive
automation uses the power of AI to move all the scattered information to detect patterns and
provide a better conventional system. In the future all these technologies when working
simultaneously we can see a paradigm shift from simple intelligence to a more adaptive,
predictive, and system which is capable of making better decisions and making continuous
improvements using Artificial Intelligence in the supply chain and the use of Machine
Learning in the existing data sources.
When Artificial Intelligence is applied in demand forecasting it can predict accurate future
based demands. Here we can take an example, we can forecast the decline of a product life
cycle from starting to end of its life accurately on the channel, with the growth present in the
market condition of a new product it can be easily achievable. Just like that, Artificial
Intelligence in supply chain forecasting makes sure that all the material bills and the purchase
orders data are accurately structured and all the predictions are made with high accuracy in
time. This will help the operators who are working in the operations field in maintaining the
levels to an optimum condition which is required to meet the current and the end term
demand.
Today’s Supply Chain looks totally different than it was a few years ago. There have been a
lot of innovations like innovative warehouses, ship from store models, etc. Artificial
Intelligence can help in the Supplier-related risks and with the use of cognitive computing,
the real-time models that are created will be more accurate to predict the revenue throughout
the supply chain on a weekly, monthly, and quarterly basis. It can be said that the
advancement of technologies such as robotics, mobile computing, cloud data, neural
networks, cloud-based machine learning, and all the algorithms has actually propelled the use
of AI in different sectors. Today almost all the major businesses are using AI in their business
sectors because AI delivers significant competitive advantages. However, there are still many
changes that need to be done to get the maximum benefit from AI. We can say that AI has
already become a global trend in all the operations of industry and it has become a priority
for all the major corporations around the world. In the Upcoming future, Artificial
Intelligence will set a new benchmark for supply chain management and logistics. This
technology will change the perspective and will put a new solution in how the companies
manage their data, serve the customers and run the operations in the most efficient and
automated way. By few years Artificial Intelligence and its related technologies will be
integrated into the global supply chain management on a much broader scale. For the
companies to remain competitive, they should start selecting the best cognitive AI solution
and should implement their supply chain strategies before they lag behind from all the
competitions.
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