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AI Being Employed to Help Relieve Supply Chain Woes
AI in a disrupted supply chain can help reduce the impact of a scattered workforce with self-adjusting plans and self-optimizing processes.
By John P. Desmond, Editor, AI in Business
AI can help supply chain planners make more accurate and informed decisions as they deal with the effects of the pandemic, supply shortages and security threats.
That’s the takeaway from a recent report from APQC, a non-profit, member-based organization focused on best practices.
“AI has the potential to assist with all aspects of the supply chain, from the ability to create self-adjusting supply chain plans to enabling manufacturing operations to self-optimize processes,” stated Marisa Brown, senior research lead for APQC, in a recent account in Supply Chain Management Review.
Research by APQC identifies AI as one of six trends to make a significant impact on supply chains by 2023. Savvy companies adopting AI are making an effort to prepare their employees with the reskilling training and development they need. “This effort is essential to preventing skills shortages as the supply chain field continues to evolve,” Brown stated.
AI adoption in the supply chain is ramping up, but it is still at a low level. APQC found only 13 percent or organizations using AI have been doing so for more than two years. However, 36 percent have had AI in place for less than one year, indicating accelerating adoption. At the more experienced end of the range, some 38 percent of the organizations surveyed have moved beyond AI in a pilot stage.
The adoption of AI is changing the skills required of supply chain professionals. APQC found that as more tasks are automated, humans are needed to engage in work involving more analysis and insight. These might be called soft skills. “Technology is not a substitute for the relationship-building skills that support listening to stakeholders, and communicating effectively with business partners.” Brown stated.
The top skills required to help implement AI include: active listening, oral and written communications, creativity and innovation, and technical skills in data science, machine learning and modeling.
“The soft skills of employees become critically important. Supply chain professionals must be able to look at evidence and make the best decision for the business, especially in situations in which there is no evident “right” answer,” Brown stated.
Disruption and a Scattered Workforce Spur Automation Efforts
The pandemic has led to supply chain disruptions and a scattered workforce, opening up interest in furthering automation to get the work done with fewer employees in many cases.
The AI can get a lot of the work done. “AI can extract actionable insights from machines, cameras and other sensors deployed on the production floor, help keep production output up and running and deliver the products to the next step of the supply chain, all the way to the final consumer,” stated Max Versace, CEO of Neurala, a deep learning neural network software company based in Boston, in a recent account in Forbes.
Since the beginning of 2021, applications of AI in manufacturing have become more commonplace, such as in the food supply chain, where AI can be applied to optimize growing conditions and monitor quality. On the factory floor, AI helps make sense of complex sensor data sources from food packaging machines, alerting operators of departures from normal production regiments. “This prevents costly shutdowns,” Versace stated.
Using AI, food manufacturers may be able to achieve a 100 percent inspection rate, long a goal in the industry. “AI is uniquely suited to maximize food production and minimize waste — contributing to an overall healthier supply chain,” Versace stated.
The reason supply chains became so disrupted are many and varied, but, “The simple answer is there is a sudden and massive surge of demand that far outweighs the market’s capacity. The global chain infrastructure that exists simply can’t handle the volume of products flowing through the economy,” stated Craig Fuller in an account on the blog of FreightWaves, analysts of the freight and logistics market, based in Chattanooga, Tenn., where he is CEO.
Fueling the demand was government stimulus money in the hands of consumers who spent it, reducing inventories. At the same time, domestic and global production was slowed or shut down. “Production was shut down while the US economy went into demand overdrive,” Fuller stated.
China and the US ramped up manufacturing and products started to flow again in 2021, with bigger volumes. Every container ship was put to work to move cargo across the oceans. “However, ports were built to handle a certain volume and each port has a finite number of cranes and space to store containers,” Fuller stated.
The pressure moved to the trucking industry to move the cargo out of the ports, but the industry is short on drivers. Warehouses were filling to capacity and the rail infrastructure was also being overwhelmed.
“Trucking has the most challenging labor picture of all; it simply is a job of last resort for many people,” Fuller stated, adding that he sees supply chain disruption continuing for the foreseeable future.