AI In Supply Chain Management – What Business Leaders Need to Know

AI In Supply Chain Management – What Business Leaders Need to Know

Machine learning is a transformative technology being applied in logistics, healthcare, finance, and just about every other industry out there. These tools acquire, classify, and organize information through algorithm-based feedback loops that let the machine recognize patterns and predict future trends. Naturally, these solutions tend to provide significant optimization potential over manual processes, but they drive particular value in supply chain resource planning. Business leaders should be aware of these applications and how they can apply them to power their supply chain operations.

Demand Planning Becomes Automatic

Demand planning is one of the key applications of supply chain machine learning. These algorithms take historical shipment data and create predictive models and forecasts, which are compared to actual shipping volume to improve the efficiency of demand signals in supply chain operations. 

These forecasts take into account your past sales history, channel/point-of-sale data, current inventory, and future marketing plans to better position your company in the areas that matter: Inventory optimization, cost management, and the overall customer experience. 

Granular Forecasts Are Possible

AI-enabled resource planning tools give your company the power of focused, individualized forecasting across a broad range of metrics. Forecasting used to be somewhat generalized, but with enough data (and the machine learning tools to back it up), companies can forecast across smaller timeframes (think days instead of months) and keep them focused on more specific variables. For example, forecasting demand at the store level—or even the product level—to provide a structured breakdown of specific revenue streams or individual product performance. 

Achieving Complete Transportation Visibility

Machine learning applications show great promise in transportation vendor management, particularly for large, sprawling supply chains with numerous touchpoints across transportation, warehousing, and last-leg distribution. 

Freight savings might be the key driver of transportation optimizations, but the real value of machine learning systems for transportation isn’t cost-based—it’s visibility. Sure, transportation is a known culprit for hidden supply chain costs related to late deliveries, inefficient transit mode-shifting, and expensive expediting, but these are symptoms of the larger problem. Without visibility, business owners have no chance of addressing these issues. 

Machine learning systems aggregate data from every vendor system and help supply chain operators proactively identify areas of inefficiency. Aside from providing predictive insight into shipment schedules and vendor performance, they help illuminate the hidden weaknesses of supply chain operations and makes it easier to find solutions.

Your Customers Expect It

They don’t expect you to have machine learning per se, but they expect a level of service that’s becoming increasingly difficult to provide without an AI-based, supply chain resource-planning solution. Customer expectations are higher than ever, and while it may have once been a point of competitive advantage to have tight alignment between decision-making and various S&OP stages, today, we call that “keeping up.” 

Companies need a way to pre-empt supply chain problems before they occur. If an ordered item is out of stock or a shipment is delayed, customers expect to hear about it in real-time. Machine learning platforms can be trained to automatically set up fulfillment alerts, shipping notifications, and other triggers to help manage customer expectations.

Modernize Your Supply Chain Operation

Business leaders are, by nature, proactive rather than reactive. They understand well the challenges their companies face and what pain points prevent their growth. Machine learning offers solutions for many of the biggest challenges facing supply chain operators today, and as time goes on, the companies that get on board early will be in the best position to mature their platforms as they grow. 

If you’re ready to explore the possibilities further, click here to request a free demo of the ketteQ platform!