AI set to revolutionise the supply chain

With AI, large data sets can be interpreted and processed, thereby adding huge value and creating unprecedented business opportunities.

Cape Town, 20 Jun 2019

Supply chain management in any business sector is a network of activities related to the design, production, delivery and service of a product. “This complex grid forms the perfect ecosystem for businesses to harness the power of artificial intelligence,” says Warwick Hopcroft, sales director of Bluekey Seidor.

Artificial intelligence (AI) is defined as the use of computers to simulate human intelligence, specifically learning and reasoning. Learning involves the acquisition and classification of information, while reasoning refers to using rules to reach conclusions. 

“So, at its core is the ability to recognise patterns and to gain insights from data,” explains Hopcroft. “Large data sets can now be processed to find correlations between seemingly diverse types of data to allow businesses to make informed decisions and respond timeously. 

"It is quite exciting to think about the impact AI will no doubt have on almost every aspect of the supply chain in the very near future."

AI for smart transportation planning

Take, for example, transportation planning, a key part of supply chain management. In the past businesses had very limited access to information to plan delivery routes effectively. Today there are AI-enabled systems that gather and correlate external data from disparate sources such as social media, news feeds, weather forecasts and historical data to track and predict supply chain disruptions.

The ability to filter and interpret big data

According to Hopcroft, the key advantage of AI is its ability to filter through and interpret large volumes of data. Much of the information businesses now have access to would, in fact, be completely useless without this ability, he argues. Those who can extract the most value from their data and information will come out tops in the long run.

Amazon’s investment in AI projects such as the Echo wireless speaker, which listens to and speaks back to customers, shows how some companies are gearing up to take full advantage of the value and influence of big data. 

Kevin O’Marah, a director at Amazon, explains that the company is working on developing "contextual awareness". This means getting a complete picture of each customer by knowing what they want, and when, where and why they need it, to be able to go beyond selling what they want at the time but also what they want and need before they may even realise that they need it. The personal data collected will help future AI applications to know the difference between what the customer wants and what they need.

“Just imagine how much data a company like Amazon would need to have collected, rejected, analysed and interpreted in order to be able to tell us what we need with personalised offerings to make it possible for us to get exactly what we want, when and where we want it,” Hopcroft says. 

“Powerful databases like SAP HANA, coupled with capable data mining and an analytical platform, are the way to establish a real business advantage when handling big data.”

Navigating through complexity

The impact that AI is likely to have on businesses is exciting and far-reaching, but Hopcroft warns that moving into an AI-led system within a supply chain is complicated. “An AI system typically requires an extensive team of planners for its implementation, which is likely to consist of complex engines running at each step of the process and each node in the supply network.” 

Add to this the fact that you will have to be able to deal with many different personalities, says Hopcroft, as well as the conflict between functions and partners, and the possibility of potentially huge opportunities opening up that could go unnoticed.

“AI will create value in unexpected and unprecedented new ways. The challenge lies in anticipating these changes and then ensuring that you are able to capitalise on them, up and down the supply chain,” he concludes.

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Editorial contacts

Craig Johnston
Marketing Manager
(021) 551 0768
cj@bluekeyseidor.com