12 May Benefits of Using AI and Machine Learning for Supply Chain Management
As per the MHI Industry and Deloitte’s report published in 2020, 12% supply chain insiders say their organisations are using AI and 60% expect AI to be integrated within the next five years. Seeing the response, it can be ascertained that AI and machine learning are being seen as positive forces for the supply chain management industry with organizations slowly changing their business process using AI-based applications
What is the advantage of leveraging AI and machine learning for Supply Chain Management?
Money: Higher ROIs
As per a McKinsey November 2019 report, supply chain management stood at the third position when it came to revenue increase on lower investments after leveraging AI – with market and sales, and product and service development being the first and second. AI & ML are essentially a one-time investment and the algorithm keeps learning on its own once the initial datasets are fed into the system.
Optimization of business: Machine learning for supply chain planning
In the same survey by McKinsey, savings have been reported through logistics-network optimization and spend analytics post adopting AI. Machine learning (ML) within supply chain facilitates businesses into forecasting demand, and supply and stock inventory accordingly. ML, thus, optimizes supply chain decision-making.
Automation: Chatbots in operational procurement
Chatbots, through automation and augmentation processes, enable reduced costs of sales and transactions. Documentation of invoices and payment requests are made easier with chatbots keeping records. Most common questions can also be answered via chatbots. Internal questions regarding inventories can be researched and answered. Moreover, chatbots can send responses to suppliers for compliance materials.
These are just some of the benefits of AI adoption in the SCM. What are other AI applications that could bring change in the industry? Share our thoughts in the comment section.