Approach to the integration of artificial intelligence in the strategy for its supply chain

Barcelona, ​​March 25, 2018.- The digital transformation that we are fortunately experiencing is dizzying. Unstoppable. Necessary The Directors of systems, information technologies, IT, integrate in their companies new solutions, new platforms.

But they see that the next day they have to know other technological offers, other change management, new innovations. It is the constant technological chain, attached to the supply chain.

The optimization of the processes, the increase of the productivity, need their time of study, analysis, implantation, more study, adaptation to the changes, monitoring and verification of results.

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To coexist with so much technological change, a professional partner is recommended, with proven track records and proven returns. A partner who recommends reading the following approach to artificial intelligence for your company. It comes from Digitalist Magazine and we think it will be useful for its adaptation to digital transformation:

1. Extend your IoT platform to build a smarter supply chain
As IoT devices get increasingly smaller and more prevalent in every asset along the supply chain, an impressive volume of data is not fully leveraged – leaving much of the insight it contains in the dark. Personally, I think this common problem is not a problem at all. Instead, it’s a sign that the IoT is maturing to a point where AI is the natural next step to discover and use real-time information in the best way possible.

For example, when a new customer signs a contract, production planning can start automatically. A digital signature triggers warehouses to pick and ship goods needed as outlined in the agreement. Then production is scheduled, and qualified and available human resources are assigned by a system. If employees need to travel to a customer location to install a machine, arrangements are made in parallel. Through AI, the best rates for hotels, flights, and car rentals and dates that fit into everyone’s schedule and time restrictions can be determined immediately.

Once installed, the machine can use Big Data algorithms to learn patterns and behaviors. This approach enables them to detect the threat of malfunctions that require maintenance, define factors impacting performance, and optimize processes and opportunities for automation.

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2. Drive profitability with unprecedented optimization and simplification
The struggle against complexity is something that plagues the mind of supply chain managers. From a growing network of suppliers and the risk of corrupt sourcing practices to trade restrictions and just-in-time delivery, automation can help them sleep better at night. Center for Global Enterprise research reveals that the more digital the supply chain, the greater the chance the business can reduce procurement costs by 20%, lower supply chain process costs by 50%, and increase revenue by 10%.

For example, beverage powerhouse Schweppes Australia combated the inaccuracies and inefficiencies of its supply chain by upgrading its entire distribution center management system with AI technology. The paperless system gave supply chain managers greater visibility into every task – from sourcing to last-mile delivery – to eliminate inefficient practices such as over-replenishing pick faces, which often led to delivery delays and suboptimal spend.

By introducing more flexible and efficient practices, Schweppes’ supply chain processes are now 99.9% accurate. Managers monitor shipments, at the click of a button, to pinpoint and evaluate gaps in replenishment, prioritize and sequence order drops, and oversee process status. As a result, the company streamlined its order shipment process to picking by bulk, transferring orders to the staging line, dropping actual orders, and retrieving orders from the staging line.

3. Maximize the potential of every employee involved in supply chain processes
The use of robots in the supply chain is a hot topic. But contrary to widespread fears, the real news is not about eliminating human jobs – it’s about making work more meaningful and challenging for everyone while offsetting a looming labor shortage. In fact, IDC predicted that 50% of fulfillment centers will have co-bots operating next to humans in the picking, packing, and shipping floor to drive productivity up 30% and lower the cost of operations.

For retail heavyweight Amazon, deploying an army of over 30,000 Kiva robots across a few of its warehouses in 2014 saved roughly US$22 million. And if Deutsche Bank is correct, the company will pick up an additional $800 million in savings as more plants are given the opportunity to use the technology.

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4. Turn your supply chain into a source for value-add services
Supply chain management should prepare for the future by implementing the IoT and defining new use cases to tap into never-conceived revenue streams. And if there was a reason to get started, hygiene company Hagleitner is an excellent source of inspiration.

For years, Hagleitner has been a reliable bathroom supplier for fast-food restaurants, hospitals, and theaters throughout Austria as well as multiple cruise lines internationally. As the demand for its services grew, the company decided to make its operations more efficient by embedding sensors to track everything from the use of faucets to stock levels of soap, air freshener, and paper towels.

This strategy not only made services more responsive, proactive, and consistent, but the company is also saving warehouse space, meeting demand with greater sustainability, and optimizing logistics processes and personnel assignments. At the same time, its customers are assured that their bathrooms are well-equipped and address every visitor’s bathroom needs.

The more supply chain technology matures, the smarter the supply chain will run. While the IoT is helping your supply chain respond faster and more flexibly to market changes, it is still important to look ahead and see how the data you’re generating can take your supply chains to new levels of efficiency, demand forecasting, and speed.

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