How AI & Advanced Analytics Are Transforming Logistics & Supply Chain
Eventually, the players have realized that in order to survive and thrive and to enjoy a competitive edge in the market, tech adoption is the only viable solution. Incorporating technology especially Artificial Intelligence and Advanced Analytics has helped them in transforming the supply chain models altogether. Not only has the visibility of the market improved but tech solutions have also helped the industry players in better planning as well as management of production and sourcing of resources.
Digitization transforming the supply chain process
Consider a simple situation- if there is a stockout then players need to quickly replenish it. When the customer demands the out-of-stock product, the manufacturers prioritize producing this order. The remaining available capacity is then used for the upcoming orders for the same product family. This way the demand for the priority stocked out order, along with the non-priority orders could be fulfilled. However, the rest of the orders above the daily capacity fall into the backlog for next-day production until the time they will again be pushed by priority orders. This pushes the need for efficient sales and operations management. This is when the new-age tech solutions help industry players in fulfilling the customer backlog by striking a balance between customers' needs and production efficiency.
In the present times, having efficient operations management, seamless handling of order backlog, accurate data gathering and prediction along with transparency and visibility in the entire supply chain model is the dire need of the hour. Real-time data captured with the help of AI ensures visibility of the supply chain and enables organizations to identify the gaps in their demand-supply model. It also offers the provision of effective, sustainable, and secured products, along with identification of potential risks with suppliers. Using a reliable analytics solutions provider helps businesses deliver the reliable and precise data that is essential for organizations to gauge the areas of vulnerability and enforce safeguards.
Artificial Intelligence enabling smooth operations in the logistics sector
By automating routine time-consuming tasks, Artificial Intelligence helps in saving time and money. Predictive analysis, deep learning, and autonomous vehicles are just a few prominent examples of how this technology is improving the entire supply chain.
AI enables accurate demand forecasting along with providing cognitive information. The technology also aids in generating profits by optimizing logistics routes as well as last-mile delivery thereby reducing the cost of shipping.
Using AI, the players can capture data and analyze information so as to make well-informed decisions within a snap and save time for the workforce. The solution also enables businesses to have access to vital information such as billing amounts, account information, dates, addresses, parties involved from the bulk of unstructured invoices received by the company, etc. It helps upscale the warehousing operations by streamlining inventory processing and enabling efficient data collection and analysis processes.
Via this technology, logistics players are able to harness the power of data platforms and create databases to monitor patterns and anomalies. This trend was highlighted by Research and Markets in its report which states that the adoption of Artificial Intelligence is contributing in bringing about efficiencies in the operations of the global logistics market.
According to Kenneth Research reports, companies are increasingly using AI to improve their last-mile delivery and offer customization to customers. It also predicts that the AI market in the logistics sector is expected to grow at a CAGR of 42.9% from 2017-2023 and will hit $6.5 billion by 2023.
Advanced analytics upscaling the supply chain model
Advanced analytics plays the role of support decision-making in the logistics sector and helps in extracting valuable insights from the data captured. This empowers players to make decisions efficiently and quickly. It also helps optimize the inventory space and value by accurately forecasting customers’ demands. Using this technology, businesses can enable inventory visibility, decipher the root causes of delivery promise failures, and introduce innovations in their offerings.
A prominent example of digital adoption in the logistics segment has been effectively highlighted in a case study by 3SC Solutions. It states how the new-age technology of AI is helping businesses drive value.
For Skycell, the objective of the tech empowered logistics company was enabling improved asset utilization. This was achieved via the assistance of predictive analytics. They built end-to-end shipment visibility of Skycell’s supply chain model inclusive of containers, production plan, and consignment visibility along with the demand processes of customer orders and forecasting. They executed this by integrating several data points from discrete systems and IoT devices. They further developed algorithms for inventory pooling and used predictive analytics for forecasting to build appropriate models. Adding to it, 3SC also deployed a digital platform by integrating all the above processes to provide users with increased visibility as well as a decision-based support system. The outcome of leveraging technologies was a significant improvement in Skycell’s asset utilization.
In the present times, one of the most effective ways to improve logistics is by incorporating advanced technologies. The segment has realized the relevance of the digital revolution and hence is already treading on the path of automation. Advanced analytics and Artificial Intelligence primarily are helping to streamline the supply chain processes and are making them accurate and reliable at reduced costs. They have boosted the sector significantly and have indeed transformed the supply chain models at unimaginable levels! As predicted in a former report by World Economic Forum, digitization in logistics could trigger the growth of the sector and could lead to the market hitting the $2.4 trillion mark by the end of 2025. Hence, it would be appropriate to say that the future of the logistics sector seems to be promising due to digital disruption!