The modern supply chain can be tracked at many places to collect data in order to optimize supply chain processes. However, to extract insights from this data, shippers need artificial intelligence (AI) and analytics tools. Here are a few specific ways AI and data analytics can help you navigate today’s complex supply chain.
Demand Planning
In a world where data becomes obsolete fast, relying on spreadsheet-based systems for demand planning can weaken your supply chain. This type of data processing can’t accommodate large sets of information and is incapable of providing insights that support data-driven decision making.
On the other hand, AI-powered planning platforms use machine learning and analyze volumes of real-time data such as events, seasonality, and weather—they can find patterns that humans can’t detect. This means you can have forecasting accuracy to quickly understand the impact different variables will have on your sale, and make better planning decisions.
AI platforms can also help you predict demand. By combining machine learning and your data (from daily sales, promotions, marketing campaigns, and product or order information) AI platforms can predict demand for a category of products in a certain location. Also, these platforms can indicate how much inventory is needed to meet that demand via goods in warehouses or in transit.
AI platforms learn as they go, so they can respond to changes in data and update forecasts accordingly. This means you can detect unexpected demand deviation and put strategies in place to handle them.
Inventory Management
Proper inventory management is key to meeting customer demand and maintaining adequate stock levels. Having too much stock may eat into your margins, having too little will drive customers to your competitor. According to IHL Group, stockouts account for $634 billion in lost sales worldwide each year, while overstocks result in $472 billion in lost revenue due to markdowns. Inventory analytics platforms powered by AI can help you maintain the right balance of stock to meet demand.
For instance, AI inventory platforms are capable of managing replenishment. By analyzing data such as lead times, historical data, and seasonal-based sales demand, AI inventory platforms can accurately predict store demand for each product in different locations and use these predictions to automate the stock ordering process.
This system can also prioritize orders by date and update restocking levels through a real-time evaluation process. Thereby ensuring you can handle unexpected events with agility and maintain service levels.
AI platforms take the guesswork out of distributing stock by using data such as demand, cost of sales, discount, to calculate demand. Thereby ensuring that distribution centers have the right amount of products available that the stores will need.
These technologies can also anticipate customer demand for products using machine learning and data and have them shipped to the distribution center before customers order them. This helps you to reduce fulfillment and shipping costs.
Supply Chain Visibility
Supply chain visibility is key to optimizing decision making and running an effective supply chain. However, shippers struggle to manage disruptions because they lack end-to-end visibility. A 2018 survey found that the biggest challenge for global supply chain managers was visibility, with 21.8% of respondents selecting this response.
AI platforms can help you improve visibility and supply chain operations. AI platforms such as control towers combine disparate data sources, analyze them in real-time and forecast events before they occur. This means you track the real-time movement of shipments and calculate their estimated time of arrival. AI platforms systems don’t just identify potential risks before they occur; they go a step further by presenting with the best course of action to mitigate these issues. Therefore, helping you make better decisions faster and take more confident action to resolve disruptions.
Furthermore, AI platforms also give end-to-end visibility of supply chain management. This allows you to receive signals quickly and enhance their ability to react to order changes, promotions, or stock-outs.
Following consumer’s demand to know where products come from, AI platforms can give you end-to-end visibility of your supply chain and ensure materials are ethically sourced and live up to your company standards.
Last Mile Fulfillment
The last-mile delivery may be the final link on the supply chain, but it is arguably the most important one. Thanks to Amazon, shoppers now expect speedy delivery and will switch to retailers that can give them that. 55% of consumers will switch to a competitor if that competitor offers faster service according to a 2019 report by Capgemini Research Institute.
Given the need for fast delivery times, manual processes for route planning can drag on your company’s performance. Manual route planning processes are prone to error, which increases the potential for service failure during last-mile delivery and can make you lose customers. 84% of customers will not return to a retailer after one poor delivery experience. With AI-based route optimization platforms, you can get customers their deliveries fast.
AI-powered supply chain analytics platforms use advanced algorithms and data streams, such as shipment information, weather, and traffic. So they can determine the best and most cost-effective route options in real-time and ensure you achieve on-time delivery. In the case of bad weather, traffic or unfavorable road conditions, these systems can reroute shipments, adjust delivery locations, and dates as needed.
Warehouses are another area AI can help to improve the last-mile delivery process. In warehouses, AI-powered robotic solutions can help handle manual processes such as order picking and automate fulfillment operations with a high degree of accuracy. These robots can also collaborate with workers and make them more efficient. With AI-powered robots, you can save time and no longer worry about not having enough labor to fulfill orders.
Bottom Line
With the complexity of today’s supply chain, artificial intelligence and predictive analytics are no longer a “nice-to-have” but a “must-have.” However, you don’t have to invest in building data processing platforms before you can gain insight from your data. By partnering with a third-party logistics provider (3PL), you can leverage artificial intelligence and advanced analytics in your supply chain management.
Many 3PLs have AI-powered analytical platforms to help you gain insights from your supply chain data. When analyzed correctly, this information can help reduce overall transportation costs, improve asset utilization, and improve operational processes. Data is the new gold. Partner with a 3PL to ensure you harness it and gain a competitive advantage.
If you are looking for a 3PL partner to work with we would love to hear from you. You can read DCL’s list of services to learn more, or check out the many companies we work with to ensure great logistics support. Send us a note to connect about how we can help your company grow.