Supply chains keep the global economy running. They ensure that food arrives unspoiled and (in most cases) contaminant-free, that diapers remain plentiful on store shelves, and that countless businesses remain afloat. Artificial intelligence and other technologies promise to improve the mechanisms of supply chain management.
These industry insiders shared their views on the state of AI in supply chain management. Here's what they said:
1. Dan Patt, CEO of Vecna Robotics
“AI is rapidly growing throughout the supply chain – from manufacturing to last yard delivery. Machine learning and AI are helping companies proactively meet the demands of a market that is in a state of constant flux due to ever-changing consumer expectations. However – it’s important to note that this technology is in its infancy. AI is built to evolve, grow, and become better, and as companies integrate it more and more, its capabilities will grow exponentially. We are not even close to seeing what it could be.”
2. Dr. Madhav Durbha, Group Vice President, Industry Strategy at LLamasoft Supply Chain Management Software
“It is in the early stages relative to applications in the customer/consumer-facing realm. There are use cases that have progressed beyond pilots into full-scale deployment. An example of this is in the realm of forecasting. Leading companies are now incorporating macro indicators such as GDP, employment levels, consumer price indices, housing starts, weather, and such to drive “outside-in” market sensing to support decisions such as capital investments and product transitions. While these practical use cases are showing game-changing improvements, the hype around AI is still high. The practitioners are burdened with the onus of filtering hype from reality.”
3. Trevor Stansbury, founder and CEO of Supply Dynamics
“In relation to the manufacturing supply chain there is a lot of justifiable excitement and experimentation but the hype greatly exceeds the number of practical, real-world applications in use at scale today.”
4. Richard Lebovitz, President and CEO of LeanDNA
“AI technology for supply chains is finally getting fast enough and cost-effective enough to deploy on a larger scale. And the business need has never been more critical. Manual spreadsheets no longer work for getting a clear view of inventory operations due to growing mass customization and increasingly complex supply networks.
In the past five years, we’ve seen a huge growth in bringing together big data, AI, and domain expertise to automate spreadsheet analysis and collaboration—which is really exciting and changing the landscape every day.
But on the practical side, there are limited examples of it being fully deployed yet. The areas where it is most critical for supply chains to utilize AI—like action prioritization, automatic root cause analysis, on-time delivery improvements, shortage management, and flow of WIP optimization within the factory—are in their beginning phases. It’s ripe for growth and we’re certainly over the chasm of innovation; it’s just a matter of making sure AI is solving the right problems for factories and manufacturers.”
5. Paul Noble, CEO of Verusen
“AI is being adopted in many supply chains today, and they're proving their capabilities in areas such as predictions and forecasting. With this, supply chains and their grander organizations are seeing more and more opportunities to deploy AI in the future. One significant opportunity is setting a data foundation that really enables organizations to build on transformations with a cleaner foundation whether that be working capital reductions, increased visibility across multiple organizations, and yes, more predictive planning.”
6. Rajesh Kalidindi, founder and CEO of LevaData
“While we’re in the early stage of adoption, enterprises and solution providers are quickly maturing and expanding on an initial set of AI use cases. In our last Cognitive Sourcing Study, for example, we saw the adoption of applied AI or cognitive technologies for sourcing increase from 3% in 2016 to 18% in 2018.
The most common use of AI in the supply chain is the application of machine learning and other methods for data classification, augmentation, and normalization. Creating a solid foundation of data quality and scope is simply table stakes for getting to any advanced applications of AI.”
7. David Hogg, Vice President of Business Development at Logistyx Technologies
“Smooth and efficient supply chain solutions are key to increasing profitability and enhancing the customer experience; more companies are turning to AI to help achieve this. Globalized eCommerce and higher expectations for speedy shipping means greater opportunity for unpredictability in the supply chain. With more companies striving to compete with the likes of Amazon and Alibaba, it's essential to adopt AI capabilities as part of supply chain strategies to keep up with and quickly respond to unanticipated changes.”
8. Jake Rheude, VP of Marketing at Red Stag Fulfillment
“That depends broadly on what kind of company you're talking about. I think a lot of legacy companies are finally starting to catch up to the potential of AI. Our friends at Transfix, for example, have been disrupting the freight sector by offering pioneering software for on-demand shipping and trucking. In warehousing, it's pretty standard op at this point to have wearable tech, along with software specifically designed to maximize worker movements.”
9. Govin Ranganathan, Senior Manager of Logistics at NIO
“Many organizations globally have recognized the importance of artificial intelligence & immense benefits that it can provide, thus have started investing strategically with varying degree of benefits based on scale & maturity of systems in place. On a scale of usage of AI in supply chain, it varies from very high usage (50%+) to extremely low usage.”
10. Heather Gadonniex, the VP of Marketing at Samasource
“We’re seeing artificial intelligence transition from somewhat of a futuristic term to something people use every day without even realizing it. From retail to agriculture, autonomous vehicles to warehouse robotics, companies are recognizing the benefits of having access to large amounts of data, including reducing operating costs, boosts to productivity, predictive analysis and enhancing the customer experience.
According to the report, State of Artificial Intelligence for Enterprises, Supply Chain and Operations is one of the top areas where businesses are implementing AI. McKinsey & Company estimates the adoption of AI has the potential to deliver global economic activity of approximately $13 trillion by 2030, 16 percent higher than today’s cumulative GDP.”
11. Pervinder Johar, CEO of Blume Global
“AI is a major driver in optimizing the modern supply chain. In fact, business leaders who aren’t already implementing AI run the risk of falling behind and will likely struggle to maintain, or obtain, a competitive edge. Among the industries to benefit most from AI adoption, supply chain management is in the top three, according to a recent McKinsey global survey, and 76% of respondents at supply chain companies have already reported moderate to significant value from deploying AI.”
12. Ed Clarke, co-founder and Managing Director of Yojee
“It is something that is universally desired and gaining faster and faster traction. One of the most obvious applications is with route optimization, and this is visible in a lot of Transport Management Systems (TMSs) in one form or another.
We are seeing AI being used to predict volumes from both the planning and procurement departments of major retailers, to shippers assimilating commodities markets data to predict movement trends. Yojee is assisting companies by providing support on planning, executing and real-time management of fleets and networks.”
13. Doug Surrett, Chief Product Strategist at BluJay Solutions
“AI in the supply chain is being fueled by the need for manufacturers, retailers, logistics service providers and other participants to uncover new ways to optimize their networks, modes, and processes. Fueled by eCommerce giants, customer demand, and those setting unprecedented speedy delivery timelines, AI is being considered as a way to improve anything from the warehouse, to yard, to compliance and transport from first to last-mile – ultimately to remain competitive in a rapidly-changing industry.”
14. William Crane, founder and CEO of IndustryStar
“At present we have many pilots underway at our manufacturing customers across mobility, aerospace, building products and consumer products. In our experience, there are two extreme approaches to AI “big picture insights” and “productivity gains” we focus our AI efforts on practical day to day operational efficiency gains which is lending itself to greater interest in pilots and deployments. We focus our efforts on business problems, specifically tasks that require a lot of human touches, and work to develop solutions that empower humans to make faster and better decisions, not replace them.”
15. Tom Van Woensel, Professor at The Eindhoven University of Technology Department of Industrial Engineering & Innovation Sciences
“Over the past years, the evolution from ‘big data' to ‘machine learning' to ‘AI' has materialized, but it seems that a lot of this movement is driven by the ‘methodologists' forgetting about the necessary domain knowledge to really be able to fully benefit from all AI/Data/ML tools. Companies are still struggling with the nation of Big Data, and now the AI comes…”
16. Kamal Anand, Chief Technology Officer of Bamboo Rose
“There is a strong interest in AI in the supply chain industry. Overall, in the industry there is high awareness of technologies like AI, machine learning and IoT. Supply chain platforms and companies understand the importance of adopting these technologies in their systems and ensure they are making AI-enabled decisions. At Bamboo Rose, we are using dynamic production to look at what assortments and products are going to markets and how they go through the trade route. This dynamic production through AI enables optimization.”
17. Oren Zaslansky, CEO of Flock Freight
“AI is being applied in several ways right now and arguably we are still in the early stages. In my opinion there are two paths here; first are those using AI to make existing schemes more efficient ie various marketplace/matching strategies out there right now. How to most efficiently match supply and demand.
The other side are the those using AI to fundamentally change the way in which the industry currently works such as working in probabilities and predictive work such as pooling LTL or Parcel and last mile calculus.”
18. Chris Bergh, CEO of DataKitchen
“Artificial Intelligence (AI) will be the manager of the future supply chain. Today, billions of dollars have been invested in managing the supply chain. Tomorrow an autonomous, data-driven, algorithmically controlled supply chain will win emerge. The bridge to that vision is through building and operating and high quality, flexible data analytics capability today.”
19. Anand Medepalli, Head of Product at Element AI
“Spotty at best. There are point solutions at play, but typically vendors pushing AI algorithms to solve age old problems such as forecasting, pricing, fulfilment, etc. But these solutions need to work with a lot of data; data that is in disparate systems which need to be brought together for AI algorithms to really provide the incremental bang for their buck. This is where application of AI in traditional space is floundering.
On the other end of the spectrum you have Walmart who actually created its own AI Lab and has now opened its own Smart Store and is experimenting with Robots in its traditional stores. Data captured by these edge devices is ripe for the picking for AI solutions. As such, companies in the Supply Chain space are looking to start “bottom up” – from the edge where execution takes place: factory, warehouse, DC or the store and apply AI to better execute. In some sense this is a clean state area for AI to thrive if done well. That said, inter-company interaction where a retailer is engaging with transportation providers and manufacturers to ensure continuous orchestration of the supply chain is still a work in progress.”
20. Emily Murphy, Editor of Supply Chain Brief
“AI is revolutionizing the Supply Chain industry. It is slowly being implemented across multiple aspects of the industry, and the outlook is overall hopeful. AI offers increased productivity, better decision making, and even better customer experience. But adoption of technology takes times and we are currently at the beginning of this migration. With technologies fast growth, there are so many more opportunities for improvement that AI will provide.”
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