Given the unpredictability and increased complexity of today’s supply chains, along with executive demands that costs be reduced and efficiencies found, planners need effective solutions to solve these mounting challenges. Legacy software, such as Excel, has not caught up to our ever-connected and interdependent world. These traditional tools rely on rule-based prescriptive solutions, with educated guesses, a linear regression on a spreadsheet, and crossed fingers.
But there is a better way: Solutions that leverage AI for supply chain management.
Gartner expects that by 2024, 50% of supply chain organizations will invest in applications that support AI and advanced analytics, and McKinsey estimates that companies using AI for supply chain management could add $1.3 trillion to the global economy in the next 20 years. Advances in artificial intelligence, data storage, and machine learning enable planners to identify operational inefficiencies effortlessly while reducing the time devoted to manual applications. Here are some recommendations for organizations when integrating AI in their supply chain management.
Focus on Emerging Risks
Alerts about lack of supply or excess inventory are great. Still, when using legacy platforms, planners often find themselves spending weeks weeding through alerts without context or the visibility necessary to make informed decisions. Putting an AI-powered solution, such as Vanguard, behind those alerts allows for emerging risks to be quantified. It gives the entire team visibility into exactly which problems are putting the most resources on the line.
Overproduction results in excess and wasted inventory from overestimating demand, or the opposite can happen when near-empty trucks from logistical oversights result in wasted transportation costs. As companies begin to look closely to find and address inefficiencies in their supply chain, AI-based solutions offer an excellent way to identify excess stocking, improved distribution strategies, and much more.
Human Insight is Still Important
AI does not replace the experience and expertise that a seasoned supply chain planner brings to strategic decisions. Instead, AI provides a foundation of highly accurate, real-time, connected management of supply chain data and forecasts so that planners have the foundation needed to grow certainty and resilience in their projections.
AI-based solutions are not meant to eliminate the need for human talent; rather it enhances it. The ability that AI has to automate insights and calculations across immense amounts of data saves time and increases the accuracy and resilience of the planner’s forecasts.
Make Relevant Data Available
Legacy systems often add complexity to a planner’s digital workspace. When working with siloed data in Excel rather than a single source of truth, it is common to have multiple versions of a spreadsheet, redundant alerts, and potentially permission or visibility issues. AI for supply chain management excels at data manipulation, tagging, categorizing, and correcting the many data streams that legacy systems produce. AI makes all the relevant data readily available so planners can focus on mitigating disruptions, not sorting through tangled data sources.
Fountain Tire found that with Vanguard’s AI-based solution, their inventory analysts can automatically prepare baseline forecasts. Fountain Tire’s forecast dramatically improved. In addition, the time analysts spent juggling cumbersome spreadsheets and manually adjusting forecasts was replaced with time adjusting the improved baseline forecasts based on market intelligence, collaboration, and coordinated goals and sales projections.
Supply chain planners did not need a worldwide pandemic to show them what they already knew: the importance of having advanced supply chain planning solutions that support the organization’s process. AI-based solutions enable planners to automated insights across large data sets, allowing them to see emerging risks as they arise. Now is the time to support supply chain planners and leaders with solutions, like Vanguard, built with AI for supply chain management at their core.
Want to learn more about how to get off legacy systems, like Excel, and integrate AI into your supply chain management process? Download the recording of our webinar, Breaking Up with Excel with Concord Foods. Hear from Jen Moore, Sales Planning Manager at Concord Foods, as she discusses the challenges to digital transformation, the advantages of an automated, collaborative, AI-based planning platform, and how they achieved success with Vanguard in less than three months.