Skip to main content

3 Ways to Prepare for AI to Make Your Supply Chain More Successful

If you haven’t had a moment in the last 6 months where you’ve thought to yourself: “Wow, AI can do that?”, then you haven’t been to enough AI conferences or presentations, and you might be missing the boat.

We’re at the dawn of the era of Artificial Intelligence (AI), at least in supply chain. Many industries and job functions have steadfastly welcomed the addition of AI technologies into their day-to-day work and operations. Supply chains have been behind the curve in doing so, and for good reasons, but not necessarily a lack of inspiration.

Embracing AI Technologies for Supply Chain Success

Some of the early-adopters of AI in supply chain have leveraged technologies such as the following: two mini AI robots working on laptops side by side

  • Technology that can read documents, from Excel spreadsheets to PDFs, and transpose order information into an order management system automatically.
  • Technology that can automatically create, route for approval, and send POs once they are approved by a planner.
  • Inventory planning technology for vendor-managed or off-site inventory storage locations that reduce the need for manual inventory review or expensive telemetry to monitor levels.
  • Demand planning that is correlated to external influence factors, such as temperatures or sporting events, that can get more sophisticated in forecasting than regular statistical forecast modeling.

Some of these technologies are becoming standard offerings included with other packages. Did you know that some technology platforms automatically offer a chatbot? Since it’s already included in the package cost, why not leverage the tool and explore its potential for your business?

The key to being able to leverage AI is to be able to “teach” the computer what it needs to know to make decisions.  Computer intelligence is simple: Think of a computer as being able to learn trends and rules and then make decisions based on how it is told to make those decisions.  (Living beings do that as well, we just do it with a level of personal preference and emotional charge, which we can program out of AI.)

Preparing Your Supply Chain for AI Integration

Here are three key areas we highly recommend focusing on so that you're well-positioned when you embark on your journey of leveraging AI to optimize your organization's supply chain and operations.  Even if you’re thinking, “we’re a lifetime away from AI” we have great news. These same initiatives will also significantly improve your current day-to-day activities, especially if you are working with teams and/or within an ERP/MRP system.

Process

As supply chain consultants, we always start with the process. Let’s take an example from above. Suppose you want to automate a purchase order process; you need to have a standard set of tasks and decisions that can be designed into the workflow. It may seem obvious, but once that PO is authorized, the automation needs to know how to check the pricing, whom to route for approval (based on PO value), what to assume for the planned receipt date, etc. If the process cannot be standardized because everyone does it their own way, then it becomes challenging to utilize AI and Automation.

Related Read: Optimize Your Supply Chain Operations to Boost Efficiency and Reduce Costs

Data

Which brings us to data. For processes to successfully “speak” to a computer, the language of data must also be standard. A computer cannot look at something and know that it is supposed to say Bullwhip when it is entered in the system as bull.whip, bull_whip, bulwip, or Bwhip. It only knows if you teach it. To teach it, you must create a relationship table that shows that each of those = Bullwhip. And for the effort, you might fix the problem and streamline your data. 

Now, from the examples above, automated order entry seems like a dream, but the computer has to know where to look and what information it can expect to find. So, one of the challenges here is getting your customers to enter orders in a standard template. Some companies have solved this by asking customers to submit orders via a porta, or they’ve asked them to use templates that they’ve provided. Technologies that can read documents like PDFs may have more flexibility in the format the document is received but will still need to be taught how to see things like Company Name, Order Quantity, PO Number – and all the possible permutations of how a customer may write. If the company Bullwhip LLC calls itself Bullwhip, LLC, the technology will need to be taught to look for the comma.

Decisions

These could also be called the decision-making rules. Technology can take a lot of decision-making parameters into consideration, which can make it seem more intelligent. However, the reality is that you still have to teach it the if/then statements. If this, then that. And there may be dozens or hundreds of if/then statements that are required for a good outcome. This brings the reality that you will also need to know how your team makes decisions on if/then statements as they go through their process. A deep dive into all the decision points in a process, even the tiniest decisions, will be table stakes for enabling AI.

It may seem overwhelming, and we understand why. However, each of these steps will help you work more smoothly and effectively in your current day-to-day activities. By meticulously establishing processes, maintaining data, and being clear on decision-making, it will be easier to just plug and play the AI tools when you’re ready.

If you need assistance optimizing your supply chain operations and preparing for AI integration, Waypost Advisors' experienced consultants are ready to help. With industry expertise and tailored solutions, we'll streamline your processes, enhance data management practices, and clarify decision-making frameworks to ensure a seamless transition to utilizing AI technology. Contact us today to learn more about how we can support you in achieving supply chain excellence and greater success in your business.

 


Waypost Advisors is an end-to-end supply chain and resourcing solution. We offer expertise in procurement, inventory, project management, planning, transportation & warehousing to fit the needs of your B2B manufacturing or distribution company. Our advisors can provide you with the resources and expertise to tackle your supply chain challenges while allowing you to still focus on running your business.