How AI Can Help Overcome “Supply Chain Disruption”


As the chaos in the port persists with no end in sight, a disturbing realization is in order: this chaos will not subside over time,” Big Supply Chain Disruptionfelt all over the country.For example, approximately 30% of infant formula brands They run out quickly, forcing retailers to ration the number of containers customers can buy, leaving parents worried they don’t have enough food to feed their babies. This question involves industryImpacts automotive, health, hospitality, computer science, manufacturing, apparel, and more.

What’s wrong with that? Infrastructure and lack of truck drivers are often blamed.U.S. trucking companies run into record deficit There will be 80,000 drivers in 2021. This is a logical explanation since truck drivers carry a fair share of US freight. However, this is not the only cause of supply chain problems.

Causes of Supply Chain Challenges

The current inventory and planning system is based on fixed deadlines and Demand Forecast, while the real world operates on a dynamic time scale. As a result, poor decision-making and poor planning by purchasing managers and treasurers are the source of port congestion. To rectify this, managers must abandon plans and actively manage their expeditions.

While it might seem logical to think that new modes of transportation could help reduce congestion, it’s not a practical solution.

Bottlenecks cannot develop without significant investment, so from an infrastructure point of view the port limit is fixed. However, retailers will need help to change the way they plan and prioritize shipments.

How to Plan Shipments More Accurately

retailers need Real-time inventory visibility Plan more accurately in their business. Ideally, deposit planning information can be shared with terminals and 3PLs to leave the gate as a single value stream. This improves the efficiency of the FIFO process.

AI can help identify shipping or route changes early to ensure on-time delivery of critical items.

Although the implementation of AI in supply chain management is still new, early adopters are already seeing success.According to McKinsey & Company, companies using IA-based supply chain management 15% reduction in logistics costs The stock level is 35%. As AI technology continues to improve, more and more companies are looking to benefit from its capabilities.Therefore, Infoholic Research predicts that AI in the logistics and supply chain market will grow rapidly CAGR of 42.9% to 2023.

AI Use Cases Overcome Supply Chain Disruption

As AI adoption increases, hopefully it can help alleviate supply chain issues.Here are some key use cases

1. Plan to cut interest rates across the board in due course.

Customers are used to receiving their purchases within a few days.However, data from the World Economic Forum shows that delivery times to the US and Europe will be A record level by the end of 2021Furthermore, the current environment suggests that these increased delays are likely to continue.

Even in unforeseen circumstances such as natural disasters and severe weather, buyers want companies they buy from to have contingency plans to ensure timely deliveries.

AI can help companies predict full and on-time deliveries by using historical data to determine how suppliers handle orders. This allows companies to set deadlines for switching shipping methods for customers that generate the greatest profit margins. In addition, AI provides complete material visibility across the value chain, making it easier to identify and quickly eliminate bottlenecks.2. Don’t prioritize high-cost, unsuitable customers.

Not all business relationships are perfect. Gartner predicts that, 75% of companies Poorly adjusted customers will be removed by 2025.

While some companies aren’t quite ready to part with expensive customers, these loss leaders shouldn’t be high on their priority lists.

However, it can be difficult for companies to identify these customers. Using sorting algorithms, AI can automatically identify large-scale customers that are detrimental to market share growth and consume valuable capacity. In addition, AI can identify new opportunities for improvement and discover how these opportunities will affect profits.

3. Increase profit margins.

Without a clear understanding of what consumers want, companies risk millions of dollars in losses by offering products that don’t sell well.

AI-driven forecasting can help companies detect demand changes early so that products can be optimized for optimal profit margins.

According to McKinsey, AI-enhanced supply chain management provides a 65% reduction in lost sales product out of stock. In sales, AI can help sales teams identify up-sell and cross-sell opportunities for key accounts. Businesses often have little knowledge of who they should sell to. However, since most sales tasks are conducted digitally, sales teams are constantly collecting data. AI can use this information to help teams sell more effectively.

4. Faster shipping

In the communication survey, 28.6% of respondents said they were more likely to place an order with a company that could deliver the product within a week of purchase. This is a very small window of time, so faster shipping is essential if businesses want to encourage consumers to shop with them.

AI can identify shippers who are slowing down supply chains. Once identified, companies can weed out players who can’t keep up and replace them with more effective ones. Additionally, suppliers can use artificial intelligence to create simulations based on bottlenecks and outages.

Once the AI ​​knows there is a bottleneck in a particular part of the supply chain, it can predict when a company will experience a shortage based on inventory levels or extended deadlines.

Moving beyond “major disruptions to the supply chain” takes time, not time. If companies really want to deliver products effectively, they’re going to have to change their plans. By implementing AI technologies, businesses will be better equipped with the information they need to meet today’s supply chain challenges.

Ali Hassan R. co-founder and CEO by Put Inc., AI supply chain pioneer, enabling companies to perform predictive replenishment of complex supply chains.

Image Credits: This is Engineering; Unplash; Thanks!

Ali Hassan R.

Throughput Co-founder and CEO Inc.

Ali Hasan R. is the co -founder and CEO of Throughput Inc.. The company is the pioneer of the artificial intelligence supply chain, enabling the company to detect, give priority to and alleviate dynamic operation bottlenecks.

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