Business leaders are beginning to understand the importance of this. According to the Hackett Group's 2021 Key Issues Study, supplier risk management is a top priority – just behind the reduction of costs. More are beginning to realise that AI can greatly assist, from predicting bottlenecks and streamlining production to providing complete visibility and inventory management.
Below, we’ll outline how you can use AI throughout your supply chain, and what benefits AI can present for you.
How AI is used in supply chains
Artificial intelligence has the potential to make a significant contribution to your supply chain. It can greatly improve transparency across a great amount of your business, especially when shipping goods from one port to another.
It can also help you optimize various stages of your supply chain and result in your workforce being more productive to create high-quality output. It can foster a safe culture, thereby a safer working environment, and boost the improvement of your data’s accuracy. We’ll explain all this in more detail below.
Warehouse Supply and Inventory Management
AI is used to identify influential factors and patterns throughout the data in your supply chain data using what’s come to be known as “constraint-based modeling” and algorithms (a math-based modeling technique where decisions are quite literally ‘constrained’ by a minimum and maximum range of limits). Such data-centric modeling allows managers to make better decisions with regard to warehouse management and inventory stocking.
This big data predictive analysis transforms the methods that warehouse managers can use to deal with the inventory they have in their possession. It provides them with deeper levels of insight that simply cannot be unraveled with human-driven and manual processes.
AI also allows warehouse managers to optimize their inventory processes. They can now input and extract data in real time. Therefore, each time they need to find a particular set of data such as components, finished products, and parts, they will no longer spend hours upon hours searching for it.
Moreover, AI can also provide you with more appropriate recommendations for stocking you inventory. This is done through analysing the data received from purchase and production orders as well as deliveries made by suppliers.
Delivery Logistics and Routing Efficiency
Today, customers expect accurate and fast shipping. In fact, the COVID-19 pandemic has made people use delivery services much more frequently.
With artificial intelligence, routes can become more efficient. GPS tools and platforms that are powered by AI can greatly help improve delivery logistics and routing efficiency.
Profitability and Efficiency of Your Loading Processes
Both art and science are necessary to identify the most efficient and quickest ways to obtain goods from planes, trucks, and ships.
A lot of companies use software, hardware, and data analytic combinations to produce real-time visibility into their loading practices. Such insights may be used to reduce the amount of air (i.e. empty space) that’s shipped, as well as optimize the space inside their trucks, trailers and other road vehicles.
Likewise, AI can be used to design more efficient, less risky, and faster processing protocols for managing parcels.
Uncover New Methods that Save Money and Increase Revenue
One of the greatest things about AI is that it’s a fast-changing form of technology. You will always uncover new ways of doing things, that can save you money and improve your bottom line.
AI can even be used to negotiate much better procurement and shipping rates. It can also be used to determine where the changes in the supply chains may deliver higher profits as well as manage carrier contracts.
Benefits of AI in supply chain management
Using AI in your supply chain allows people to reap plenty of benefits that can have a great impact on your bottom line. Some these advantages are as follows.
More Accurate Inventory Management
Using AI, your inventory management can greatly improve its accuracy. Tasks like processing orders, packing goods into vehicles and picking off shelves are typically dull, mindless and time-consuming. It’s therefore incredibly easy to make mistakes.
This is a problem because it is absolutely critical that the management of your inventory is accurate. You may be handling hundreds or even thousands of different products, and you need to know exactly what you have in stock so you can ensure you’re keeping within budget and creating a healthy bottom line.
Thanks to AI, inventory management can become faster and more efficient. With intelligent technology overseeing your stock, you can greatly minimise the risk of overstocking products or not stocking enough. This is because AI systems are specifically designed to analyze massive datasets rapidly.
Make Your Warehouse Much More Efficient
We cannot underestimate the importance of having efficient warehouses in your supply chain. As you well know, they’re responsible for handling and centralizing your entire stock. Their operations need to work like clockwork.
At the end of the day, the reality is that AI systems can move much faster than humans. That means they’re more efficient and can solve the most complex of problems a lot faster than we can.
The whole system of technology can make complex processes simpler as well as get the jobs done a lot faster. Moreover, it can reduce the need for manpower, which in turn reduces staff costs.
Makes Your Supply Chain Safer
A safe workplace is a pre-requisite for a productive workplace. Because AI can result in better warehouse management and planning, it can also improve material and worker safety.
In addition, AI can analyze the safety data in the workplace and inform the manufacturers regarding possible risks. It can update operations and record stocking with the use of so-called ‘feedback loops’. This allows manufacturers to react accordingly, and quickly, to keep their own process and warehouses in the safest condition possible.
Learn more about AI from a freight forwarder
AI has indeed greatly modified the ways businesses operate and get their goods from point A to point B. But thanks to artificial intelligence, data extraction has become faster and easier. AI systems has allowed businesses to save time, generate more value, and reduce costs.
But AI isn’t the solution for everything and integrating it into your supply chain is not always as simple as you may think. Here at the Sourcing Co, our expert freight forwarders can help you work out which kind of AI is most appropriate for your supply chain and where you can go about implanting it.
At the end of the day, we want to help you make the best decisions you possibly can for your business, so that your brand remains reputable and your customers happy.
Get in touch to find out how AI can help.