Artificial Intelligence Enables the Digital Supply Chain

Executive Overview

Artificial intelligence (AI) is hot. Billions in venture capital have been invested in AI firms, some of them focused on solving supply chain problems. Machine learning, a subset of AI, is particularly hot. Interestingly, neither AI nor machine learning is a new technology in supply chain management (SCM). However, partly because this technology is hot and partly because there is so much more data becoming available for analysis, we’re seeing a new focus on using these techniques to improve supply chain applications. End users stand to benefit.

Key Artificial intelligence findings:

• Machine learning has long been used to improve demand forecasting, but is most useful when downstream data is leveraged. Far too few companies use downstream data even though these data sets greatly increase forecast accuracy.

• One global trade management supplier has used very advanced AI techniques to improve its application. AI talent is scarce, and the most advanced AI techniques are generally associated with finance and marketing, but this solution shows what is possible.

• Supply chain planning suppliers have cadres of PhDs in operations research working for them. They have the talent to apply these techniques. But getting the data, massaging it, and effectively moving it into the supply chain applications has been a problem. This is particularly true for supply planning.

• Several interesting AI startups are focused on supply chain management. Two suppliers focused on improving supply chain resiliency have excellent references. Others don’t yet have these reference customers, but are worth monitoring.

• Social, news, event, and weather data feeds have great potential. But except for news feeds used for resiliency solutions, these data feeds have not yet been leveraged effectively.

   

  Table of Contents

• Executive Overview

• AI Is Hot

• Machine Learning in SCM Isn’t New

• Global Trade Powered by AI

• The Next Frontier: Social, News, Event, and Weather Data

• AI Has Limitations

• Recommendations

   

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