Over the last few years there has been a great deal of interest and development in the area of artificial intelligence (AI) and the potential to improve the supply chain and logistics. There is an immense amount of data available across the supply chain from a combination of Internet of Things (IoT) devices connected directly to supply chain partners and the partners across the supply chain network. In addition to the data produced internally to the supply chain there is now also an immense amount of data available from external customers to the supply chain partners though the direct interaction with in the supply chain through through partner portals and direct interactions through integration points with supply chain external customers. The Internet and online interactions provide this data and supply chain partners would be foolish not to use this data to improve their logistics capabilities.
The challenge though for the supply chain has been two fold, how to utilize the data and what data to collect for the analysis and use of the data. Artificial intelligence starts with the collection of data for analysis and this is an important starting point. There is no way early on in the journey to determine what data will be important because the analysis must be performed first to understand the foundation and the potential. The intelligence part of the analysis also requires a great deal of information in order to validate the the hypothesis and then to determine direction based on the intelligence. Starting with the data then you can see why it is so important to collect everything because the intelligence part of the equation will generally require additional data from the same periods to confirm and validate direction.
It is important to collect all data then because you cannot tell what may be important for the analysis and then determining direction. The good news here though is that storage is cheap and the technology to analyze vast amounts of data has been improved through the improvements in technology. These two points have probably done more for the growth and development of artificial intelligence than any other developments over the last few years. These improvements in technology allow the supply chain to refine and redirect logistics activities and practices based on facts and data rather than hunches and hopes. Combine these two technologies with the growth of the Internet of Things capabilities and technologies and the potential for improvements is almost overwhelming.
These capabilities bring improvements and opportunities in automation including warehouse location and slotting, drones and robotics to improve efficiencies and reduce costs. These are not the only areas of improvement to the achieved through artificial intelligence. There will be improvements in volumes, inbound and outbound, forecasts for instance, that will bring dramatic change to the supply chain as the extended partners in the supply chain, especially manufacturers and transportation providers as the revise their processes to incorporate the analytics into their plans and procedures. The warehouse operation though will also be dramatically impacted as artificial intelligence brings the analytics to the equation that allows the operation to understand and immediately adjust labor forecasts to changes in the operation during the date based on near real time events. Artificial intelligence is just another force bringing transformation to the supply chain and the supply chain must start with a baseline of continuous improvements in the flexibility and continuous change practices in order to meet the transformations.
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