The Secret Behind the Best Supply Chain Transformations
Even the most well-oiled supply chains have room for improvement. But what if you want to do more than just improve; what if you want to transform? Data analytics and artificial intelligence (AI) can disrupt—and, yes, transform—your supply chain.
Here are the top three ways data analytics and AI can transform your supply chain.
1. Powerful predictions for informed decision-making. Predictive analytics can decrease costs, set you apart positively from your competitors, and help you better serve your customers.
The most impressive aspect of AI-enhanced supply chain management is how machine learning can reduce forecasting errors by up to 50%, according to McKinsey. For example, there is an industry-wide problem of lost sales due to a lack of available product when it's needed. McKinsey found that the use of machine-learning—based planning and optimization techniques can reduce these losses by up to 65%. This means companies can prepare for demand better—and become more profitable—than ever before.
2. Obstacle anticipation and misstep prevention. AI and machine learning can help your business avoid significant missteps.
Consider this situation: Unforeseen weather causes a traffic delay and you have a fleet of trucks carrying important deliverables to one of your best customers. By tapping into AI, you can discover alternate routes your trucks can take, how much time and money these new routes may require, and how these changes may impact the rest of your supply chain.
The supply chain is notorious for complex problems, often centering on constraints, costs, and deliveries. McKinsey predicts that machine learning's most important contributions will be in providing supply chain operators with more significant insights into how they can improve supply chain performance, thus anticipating anomalies in logistics costs and performance before they occur.
3. Enhance the customer experience. Using data analytics and AI in your supply chain management process can drastically improve your real-time visibility, which boosts your ability to proactively give customers what they want. Analyze large amounts of data and you'll find new opportunities for your company to create value for your customers. You'll also more easily identify any problems your customers might have, so you can continually adjust and meet their needs.
So how do you go about incorporating these powerful technologies and transforming your own business?
Start by evaluating your current talent capabilities. Hire a data analyst and/or data scientist who can help you navigate the implementation of these technologies and the path forward with them. Or, offer certification and training opportunities to your existing staff to help build these skills.
You can also partner with a supply chain management services provider who offers multiple models, such as the third-party logistics or hybrid operating model for total flexibility.
A transformation like this takes time and resources, but the benefits your business and customers will enjoy when all is said and done are revolutionary. Are you ready to dive in?