The COVID-19 pandemic has been sort of an eye-opener for the logistics industry. Shattering and uprooting the supply chains, shaking up the dynamics of demand and supply, and exposing the vulnerabilities of the entire logistics ecosystem, the pandemic has done it all. Some of the supply chains that successfully survived the tough times were the ones that already had the new-age, smart technologies embedded into each and every aspect of their operations. The ones that succumbed to the crisis were those who had not taken the journey to complete digitization. Perhaps, no one had anticipated the advent of something like this ever before.
Now, with the waves of disruption slowly settling logistics firms are now actively on the hunt for creative ways to optimize their operations, in order to drive maximum productivity and growth. Use of intelligent technologies such as artificial intelligence (AI) is deemed vital to make the supply chains more agile and keep them up and running by infusing the desired speed, efficiency and resilience. As per IDC’s 2020 Supply Chain Survey, nearly 28 per cent of the respondents stated “improving supply chain resiliency/responsiveness” as a top concern to drive strategic change in their supply chains.
So, let’s understand how can AI deliver unprecedented value to the supply chains? Overall, the task of managing complex supply networks becomes easy, as the use of AI gives complete transparency, visibility and control on all aspects of supply chain operations. To start with, the process of inventory management is streamlined. Well-equipped to analyse and interpret large volumes of data with utmost speed and efficiency, these highly competent AI systems use deep algorithms to provide valuable, accurate insights into projected demand and supply, consumer habits and prediction of any untoward event. Inventory management therefore becomes easy, as overstocking or understocking of inventory can be avoided with the help of useful information gathered. From order to fulfilment, both errors and costs, can be greatly controlled.
Moreover, besides better management of inventory, the use of AI in supply chains can lead to efficient warehouse management. It greatly triggers the speed of warehousing activities, as the use of AI allows products to be easily retrieved from a warehouse, and then dispatched to their final destination. Thus, a total control in the warehousing management system is ensured, which further reduces the associated warehousing costs.
Added to this, use of AI can ensure timely deliveries and high turnaround times, enhance the decision-making abilities of the supply chain managers leading to more accurate planning, improve the overall quality and productivity, reduce costs, and also promote safe working conditions, which are a key requisite in these current critical times. As per a recent McKinsey report, by implementing AI in their supply chains, 61 per cent of manufacturing executives experienced reduced costs, while 53 per cent experienced increased revenues.
Of course, AI is not a magical wand which can avert the difficult situations that are bound to come. However, it can certainly and surely equip organizations to face and overcome such situations with greater power, by putting the necessary control measures in place. Clearly, the pandemic has driven the supply chains to a point where integrating with new-age technologies such as AI is no longer a choice but a key necessity. Supply chains of today have become immensely complex and demanding, along with the consumer behaviour, which has dramatically changed in the wake of the pandemic. Companies that are aware of the changing market conditions will be quick to embrace AI-led innovation to enhance their supply chain capabilities and make their logistics smarter. This will help them respond to future events in a timely and efficient manner without hindering their growth process. So, are you one of them?
Source: Entrepreneur - India