Managing a supply chain has always been a complex process. However, in recent years, complexity has increased due to market volatility and rising demands. Therefore, there is a need for the supply chain to not only run efficiently but also to be more agile and flexible. An additional problem is increased customer demand for the companies to focus on their environmental impact. To cope with such changes, it is essential to ensure that the supply chains are resilient to various internal and external factors.
The Complexities Of Supply Chain
Managing a supply chain is difficult because of the different associated segments. To ensure a smooth supply chain, there is a need to balance its different pillars. Also, there are many pillars of a supply chain, including but not limited to production, logistics and distribution, planning, procurement, and production and sales. For instance, even though Ninja Van is a logistic firm, it also provides its users to opt for Ninja Packs. Similarly, Shopee Xpress allows customers to drop their packages at nearby locations. All these elements are very much a part of the supply chain system.
Supply chain management has evolved in the past few years. At present, to ensure that supply chain management is strong, it is essential to focus on a vast number of pillars. Even though there are many pillars, the essential pillars include sustainable operation, premium service, resilience to short- and long-term changes, and proper integration with logistics. It gives the idea of how difficult it is to manage a supply chain. However, thanks to Artificial Intelligence, the job is now much easier. Here is how Artificial Intelligence is transforming the supply chain.
Inventory Management
Artificial Intelligence brings accuracy to inventory management. It ensures that the right amount of products flow in and out of the warehouse. It helps the users prevent overstocking and saves them from inadequate stocks. Artificial Intelligence uses the database’s data to forecast various items’ supply and demand accurately. It further sheds light on the seasonal demand and the changing consumer habits.
Fleet Management and Optimization
For managing any supply chain, it is crucial to focus on its logistics and transportation system. The role of Artificial Intelligence in fleet management and optimization is massive. According to Teletrac Navman, the global transport AI market will reach a valuation of $3.5 billion by 2023. We all know that fuel cost is rising, and there is a shortage of resources. Without proper analysis of the data, not only will the efficiency suffer, but the financial cost will be huge too. Artificial Intelligence works on predictive analytics to avoid this issue. It is helpful to understand the turnaround time and vehicle demand. With this information, it becomes easier for the company to work on fuel efficiency and manage the fleet accordingly.
Reduced Operational Cost
Perhaps, the most significant benefit of Artificial Intelligence in supply chain management is that it highly reduces the company’s operation cost. Compared to manual analysis, the error of activities done by Artificial Intelligence is almost negligible. It reduces the cost of fixing human error. Furthermore, it ensures that only humans take care of the strategic part and provide all the information for it. It also increases the productivity of the cost. The overall result of which is a reduction in the operational cost.
Supplier Risk Assessments
Unnecessary investments in resources to engage in unproductive and repetitive tasks are a loss for any company. Artificial Intelligence fixes this issue through supplier risk assessments. It provides intelligent solutions to get an overview of vendors’ performance. Also, it is possible to work on deeper insights that include real-time data to assess the risk. It provides companies with actionable insights, which come in handy at times of risk.
Paperless Transaction
It is evident from the number of tasks that go into supply chain management that the documents associated with it are huge. Everything needs to be taken care of, from contracts with vendors to transaction details. Without Artificial intelligence, issues such as missing documents and human error occur. It can also impact customer satisfaction, negatively impacting any document. Artificial Intelligence digitizes the document, provides insights into it, and enables the company to engage in paperless transactions.
Supply chain management has never been so challenging. At the same time, there is Artificial intelligence here to make the process easier. Its deep insight in great frequency and granularity can be helpful for any company. Therefore, any company that deals with supply chains should surely invest in Artificial Intelligence to boost its revenue by making the supply chain efficient and resilient.
