Some of the world’s most significant leaders and thinkers are claiming, that Artificial Intelligence is history’s biggest paradigm shift. Yet, we are still only at the beginning of the AI (r)evolution. The question you might be looking for an answer to is perhaps: How will my company get started with AI in Supply Chain?
How to get started with AI in Supply Chain is a typical question that we hear from our clients. The reason being, that to some Supply Chain Executives implementing AI, can seem as complicated as landing a space shuttle on the moon. But it does not have to be complicated. It is all about thinking big and taking a step by step approach. Even though some of the world’s most significant leaders are suggesting that artificial intelligence is history’s biggest paradigm shift, we are still only at the beginning of the AI (r)evolution.
It may be difficult to imagine a world in which Artificial Intelligence (AI) creates production drawings, controls robotics to perform industrial operations or improves Supply Chain performance. However, it was once unfathomable that a computer could beat a human at chess or drive a car autonomously.
To get started with AI in Supply Chain there are some basic questions you could ask:
- Which Supply Chain problems are we looking to solve with AI?
- How transformational are we looking to be, i.e., how big a step are we looking to take?
- How automated or autonomous are we looking to become?
Make sure to solve real Supply Chain problems and take a step by step approach
Given the broad scope of AI and variations of use cases, it is vital to start by identifying what problems to solve (key objective) and what opportunities to pursue and learn through piloting.
o be honest, what we are also trying to say here is that the most important thing is to start with something rather than starting with the right thing. Embarking on the AI journey is a true learning process.
As Walmart’s CEO says, “AI is less like a project and more like an ongoing effort. As an ongoing effort, you want to figure out how AI can impact every aspect of your business. You want to understand how it affects your businesses’ core decisions, how it changes your overall strategy and business model, how you can get it into the hands of your frontline employees so they can better do their jobs, how it automates processes that don’t need human interaction and how roles in your organization need to change to best complement what AI can do for you”.
5 Steps to get Started with AI in Supply Chain
Hire new skills ahead of the curve – or train existing talent
Success depends very much on the trust and capabilities that the employees are able and willing to put into adopting new technology. When designed with people at the center, AI can extend companies’ capabilities, free up creative and strategic endeavors and help achieve more.
Start by using historical data
A technology partner can guide you through your journey, establishing a solid foundational baseline model on which to layer more and different types of data. A phased approach will help ensure a sustainable solution that meets your business objectives today and as your needs change. Data volume, data granularity, data quality, and data variety play a vital role.
Choose self-adapting models
To achieve the stability and adaptability required for operational use, it’s crucial to use self-adaptive models. These models will require less rework as time passes. Though model evaluation and tuning will always be necessary to a certain degree.
Ensure a digital culture that allows for experimentation
From a leadership perspective, it is essential to foster a culture that allows for experimentation and failure. Not all hypotheses will work or give the desired outcome.
Partner with a company which has practical experience with AI
In this approach, you are working with a partner firm that can help you with your AI journey. This partner can work with you to come up with the right AI strategies and projects, help you build out and test new ideas, and help you grow your internal capabilities. Not all firms can help you with this.
To make this work, you need to find the right partner. You should look for the following characteristics:
- A partner that can help you generate AI hypotheses that will work or have a chance to change your Supply Chain. This comes with experience in the area and a mix of business and technical skills. This can be difficult when growing an internal team simply because of its small size.
- A partner with a wide range of business and technical experience. As you develop your AI competences, you’re likely to need a diverse range of skills to help you come up with innovative solutions.
- A partner with a willingness to be transparent and share. You need to learn how AI works, and you need to own the overall solution moving forward. The AI journey will not be static.
How automated or autonomous are you looking to become?
Your decision on how autonomous the process should be as an impact on how the AI technology should be designed to work. Below you will find a description of the different levels:
Predictive
What if you could predict how your suppliers will perform? You can. The technologies available can interpret massive amounts of data from your Supply Chain and make educated scenarios on future performance based on past deliverables. It is a prediction, so it might not be 100% correct. It is all about using real-time and past data to create likely or ideal scenarios for a given situation. The ability for AI algorithms to learn from historic data sets transforms decision-making. It allows executives to work alongside AI to make more efficient, informed decisions.
Prescriptive
Imagine if you could automate the selection of suppliers or the route optimizations for your vehicles? This can be done with the technologies available. By inferring and producing simple predictive and transparent “if-then logic rules”, you can enable the automation of many of the decisions currently being made.
Autonomous
Imagine if you could predict product demand so that you could order the right amount of materials from your suppliers before you need them? With AI, you can. Low-power, low-cost IoT edge devices cannot process conventional, math-based predictive models. They must send data, often lots of data, over the network to a large prediction server and await a response. Logic-based models can be processed by virtually any computing device and used in real-time to respond to events as they happen. They can make informed decisions based on automated alerts.
We hope we have inspired you to bring AI into your Supply Chain and sincerely hopes it can improve your Supply Chain performance.
