Artificial Intelligence: The Potential of Unlocking the Enormous Value of Your Supply Chain Network
The supply chain is awash in data, but unfortunately, due to the nature of the systems involved, much of it is siloed or outdated, and nowhere near real-time, which means AI is functioning semi-blind.
Combining Artificial Intelligence with Business Network Technology
Many companies pursuing artificial intelligence (AI) initiatives are doing so as an add-on to their existing technology.
While I applaud the initiative of these companies, I suspect many of these projects will not produce the value expected.
The supply chain is awash in data, but unfortunately, due to the nature of the systems involved, much of it is siloed or stale, and nowhere near real-time.
This means AI is functioning semi-blind, hampered by missing and conflicting data.
The results are thus compromised, falling far short of the real value of AI.
Don’t let that be you.
The New AI-Friendly, Business Network Model
The old way wasn’t working. The supply chain is inherently multi-party and multi-echelon. It requires coordination across departments and functions, and across tiers of trading partners.
The current enterprise-centric software is not architected to handle today’s network business environments, so you end up with point-to-point connections, hub-and-spoke portals, and a complex mix of patchwork systems.
Trying to optimize the supply chain is virtually impossible with legacy technologies. You have siloed data and disconnected algorithms and optimization engines.
The best you can get is optimization within siloes, but that’s a far cry from planning and optimizing the whole network, based on real-time data that takes into account all orders, inventory, shipments, logistics, as well as constraints.
You end up over-staffed and under-optimized.
It’s taken a while, but now industry analysts from Gartner, IDC, Nucleus Research and ChainLink Research, have recognized the value of business network technologies and their unique ability to solve supply chain problems simply and efficiently.
The Network is the Key
The network can unlock the full potential value that is trapped in your supply chain.
Until now, with stale data, we’ve been doing weekly planning with daily adjustments. Without timely data, we can’t react to hourly, or even daily, issues that arise and solve them. So, we load up our inventory buffers and expedite far more than is necessary.
When you combine the new business network model with artificial intelligence, everything changes.
We have all the relevant data we need to fully optimize the supply chain. The new technologies can handle large volumes of data, sift, analyze, create alerts, and even address issues, in real-time. Inventory buffers come down, expedites virtually disappear, customer service goes way up. The value is incredible.
How Much Value?
McKinsey considered the potential of merging machine learning and AI with network operations to manage the supply chain. In their report on Supply Chain 4.0, they estimated that moving from ERP or hub-and-spoke type of system to a network model powered by AI, companies have the potential to reduce operational costs by 30%, reduce lost sales by 75%, and reduce inventories by 75%.
These numbers are not unrealistic, though I don’t think we’re there yet. At One Network Enterprises, we see our customers go from middle-of-the-pack supply chain metrics to figures that are unheard of in their industries.
8 Keys to AI Success
One Network’s Chief Operating Officer Joe Bellini talks about this more in the video above, 8 Keys to AI Success.
A network foundation is just one of the eight prerequisites of getting value from AI in your supply chain that is covered in this informative and educational presentation. It provides you with all the essentials you need to know to understand how AI fits into the supply chain, and how to get maximum value from it.
The video also covers the technology and data, and gives you an overview of key types of algorithms that can be used to optimize the supply chain; how to avoid “black box” algorithms; the power of intelligent agents; and much more.
Related Article: Understanding Supply Chain Application Network Technology
Related Papers
Journey Through Your Supply Network Digital Transformation
In this paper, One Network Enterprises explains how you can achieve a future based on disruptive network-based product and service models - that unlock enormous value for your business and every business partner. Download Now!
8 Keys to Achieving Success with Artificial Intelligence in Supply Chain
This white paper looks at the fundamentals that supply chains need in place in order to achieve real results from Artificial Intelligence implementations. Download Now!
Supply Chain Networks Revealed
A new study from ChainLink Research explains the new paradigm in supply chains that are accelerating business growth and performance – and identifies One Network Enterprises as a Leader in this technology space. Download Now!
Nucleus Research: Control Tower Technology Value Matrix 2019
Nucleus Research’s most recent Control Tower Technology Value Matrix 2019, found that customers are moving toward autonomous supply chain management as they look for greater visibility of their extended value chains. Download Now!
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