FASTER, BETTER, STRONGER

AI in the supply chain delivers real-time visibility and quick adjustments

- Damien Martin

For three years, the logistics industry has focused on adding transparency and resiliency to supply chains. That’s the ultimate goal of leveraging the power of AI in the supply chain, Subodha Kumar, founding director of the Center for Business Analytics and Disruptive Technologies at Temple University’s Fox School of Business, and a member of the Institute for Operations Research and the Management Sciences (INFORMS). Organizations are using AI not only to collect more data but to utilize that data to reduce cost while improving efficiency and resiliency. They’re betting on AI optimizing operations from the global scale to the last mile.

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One thing AI in the supply chain brings that was previously missing is real-time visibility. Even when demand is relatively stable, there’s high variability. That happens because of a few factors.

“No. 1, we don’t have visibility,” Kumar said. “Second, even if we have visibility, we do not have real-time visibility. And the third thing is that we have lead time. Even a certain lead time is a problem, but most of the time it’s uncertain lead time that creates problems.”

A lot of the bullwhip effect variability that came with Covid could be solved with increased visibility and resilience that AI in the supply chain can bring. Machine learning and optimization algorithms help partners across supply chains keep the right amount of inventory on hand and allow them to react faster to disruptions.