A.I. and the path to breakthrough supply chain planning

This is an excerpt of the original article. It was written for the January-February 2018 edition of Supply Chain Management Review. The full article is available to current subscribers.

January-February 2018

If you frequent supply chain conferences, as I do, you’ve probably noticed that some of the best-attended sessions are the ones that focus on emerging technologies—or what we’re calling the NextGen Supply Chain. You may have noticed something else: While topics like Big Data, artificial intelligence, augmented reality, blockchain and robotics play to standing room audiences, there’s a lot of confusion about what to do with the information. At the 2016 APICS conference, one member of the audience asked a direct question at the end of an excellent session on Big Data by Hannah Kain, the CEO of Alom: “This sounds great. But there’s not a…

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Just as electricity transformed every industry 100 years ago, Artificial Intelligence (A.I.) is poised to transform every industry in the coming decade. A.I. is already changing the ways that consumers and companies interact. Consumers rely on Siri, Alexa or Google Now for intelligent personal assistance. Companies employ predictive analytics to deliver coupons based on shopper preferences. Driverless smart trucks and cars are on the horizon. The consumer’s heightened expectations of personalization, localization and speed are increasing the complexity of the supply chain.

This complexity is resulting in growing cost inefficiencies in the supply chain as companies respond with increased numbers of functional planners, custom applications, and micro-segmentation of processes, metrics and a flurry of Excel spreadsheets straining a companies’ ability to plan. Input signals such as POS data, CRM data and localized social media data are exploding, making supply chains data rich but insight poor. Organizations are realizing that traditional process improvement and optimization is not sufficient to solve these structural S&OP problems. Instead, companies need to pivot and leverage A.I. and related technologies to drive innovation in supply chain planning while making humans more agile and efficient.

A.I. and Robotic Process Automation (RPA) represent two emerging areas that can significantly alter the supply chain planning ecosystem. (See figure 1) A.I. is the discipline of making analytical machines intelligent; enabling an entity to function appropriately and with foresight in its environment.

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