Artificial Intelligence in Supply Chain Management and Optimization |
Posted: July 15, 2020 |
Artificial intelligence is weaving itself into business systems in more ways than one. Supply chain management is one such area in which AI has a lot to offer to the enterprises. But before we talk about how AI is beneficial for enterprises, let us see different types of AI and how they serve different purposes.
The procurement of raw materials from suppliers and vendors takes a lot of time and effort. Exchanging information, confirming details, placing an order, sending and receiving invoices, etc. are just some aspects of procurement. A major part of the process can be handed over to chatbots that act like humans and interact with suppliers. From asking questions to placing orders, chatbots are programmed to perform a certain set of actions and record the transaction in the database. As chatbots are 24*7 online, the time taken to wait for a response is reduced.
Stocking inventory is usually done based on demand and supply in the market. Enterprises should have enough products to cater to customer demands without overstocking and end up with little or no space in the inventory. By setting parameters for balancing demand with supply, AI tools can help enterprises ensure that the inventory is optimally stocked.
Warehouse management is interlinked with supply chain planning. Inventory is stored in warehouses and moved to other destinations as and when required. Overstocking and understocking are both bad for the enterprise and could give competitors an advantage. Machine learning helps in finding the optimal level of inventory to store in the warehouse.
The stock has to be delivered to other distributors in the supply chain or the end-user. Logistics determines the delivery time, which could have an impact on customer satisfaction. Faster deliveries will make customers happy. It will also help enterprises clearing out the stock to add more. Choosing the right way of delivery, that is cost-effective and efficient is the key to success shipping. Bringing in driverless trucks or autonomous vehicles is also a part of AI implementation in supply chain management.
For the supply chain to be strong, choosing the right supplier becomes a priority. Risks related to suppliers and their ethics have caused quite a bit of harm in the global market. Choosing a not-so suitable supplier could cause potential damage to the enterprise, even if everything else is perfect.
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