Vince Poon is CEO of Aratum. He works with enterprises and governments across Asia to achieve supply chain digital transformation.
How is your business tackling supply chain innovations? With the onset of the Fourth Industrial Revolution, emerging technologies such as artificial intelligence (AI) have transformed logistics and distribution operations.
AI has been applied in various supply chain scenarios, from robotics delivery in pharmacy operations to manufacturing quality control using sensor data to virtual reality for employee training.
AI pioneer Marvin Minsky put AI simply: “The science of making machines do things that would require intelligence if done by men.” By taking advantage of the endless possibilities new technology provides, we can solve problems that could not be solved before.
Lead With Challenges
What problems keep you up at night? Are you adapting AI just for the sake of AI?
According to Gartner, chief supply chain officers (CSCOs) are worried about their supply chains’ ability to handle upcoming challenges in the next two years. Even if they were ready, it is hard to address immediate supply chain priorities while also advancing for the future. Critical global issues such as the Covid-19 pandemic, geopolitics and logistical delays are beyond business’s control and threaten their smooth-flowing supply chain.
While it’s easy to get caught up in the AI excitement, a comprehensive, problem-driven approach is essential in any supply chain. To fully appreciate the business value of new technology, think of a problem you want to solve or a use case you want to create.
For example, during the onset of the Covid-19 pandemic, there was a huge need to roll out vaccines fast and deliver on a large scale so that people could be protected. The supply chain issue of vaccines was paved with challenges because the Covid-19 vaccine (Pfizer) needed to be stored between -90 C and -60 C and then between 8 C and 30 C for up to 24 hours after thawing. There was a lack of warehouses and manpower, and vaccines could easily be damaged during transportation, leading to a high loss ratio.
So, the problem was clearly defined before the decision on what technology to use was made. At the time of the pandemic, pressing problems in the supply chain led to innovation in how technology could be applied.
Technology companies like Cisco introduced AI tools that enable real-time monitoring, alerting and control over vaccine storage conditions and distribution processes. Disruptions in the supply chain were inevitable, but technology ensured the safe and efficient delivery of vaccines, maintaining their quality and integrity, thus helping the lives of millions.
AI Empowers, Not Replaces, Supply Chain Professionals
Many businesses, however, are still reluctant to invest in new technology, as they’re unsure about the cost-benefit ratio. This is because of a general lack of knowledge of the role that AI can play in supply chain management.
Let’s reframe the perspective. As Cold Chain Technologies CEO Ranjeet Banerjee put it, supply chain managers are “probability managers.” How you get assurance for products traveling long distances and complex routes is a multi-parameter problem. The best solution will result in high assurance and minimum cost.
What if you can start training the machine and detect abnormalities? With supply chain management software, you can log every action in your supply chain. Combined with the use of IoT (Internet of Things), any changes in temperature, light, odor, packaging and delays in transportation can become visible and meaningful data to the managers. With such data, you can be alerted promptly of disruptions. The probability of goods falling to spoilage will then become a risk that can be mitigated.
AI is not omniscient. AI will not likely replace humans, but in this writer’s view, supply chain management with AI will replace supply chain management without AI.
AI is not only there to predict your next words in emails. Together with human intervention for complex planning and strategy development, we can achieve unprecedented synergy with the power of technology. Using technology that we didn’t have before, we can now solve problems that were once deemed impossible.
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