AI in the supply chain is ‘not just hype’

Ti’s Chief Executive and Founder of the Foundation for Future Supply Chain, Professor John Manners-Bell, recently moderated a panel on Artificial Intelligence at the Kuehne + Logistics 1st Supply Chain Orchestration Summit in conjunction with Capgemini in Brussels, Belgium.  The session, involving senior supply chain officers from pharmaceutical, healthcare and consumer goods manufacturing companies, was aimed at cutting through the hype surrounding AI to identify actual use cases, as well as assessing the likely impact of the technology on the industry.

At the outset of the session Manners-Bell delivered some introductory remarks, saying that the technology was already playing an important role in improving profitability, productivity and customer service. This role would only become more important. In terms of transportation, AI would empower Chief Supply Chain Officers to simply and easily interrogate transport and logistics systems to ascertain:

  • The lanes achieving the best service levels
  • The most costly freight lanes
  • Why they were paying more on some lanes than others
  • What they should do about it
  • Why some freight contractors were being overpaid and
  • What cost savings could be made.

The ensuing panel discussion showed that AI was already being taken very seriously by some of the world’s largest buyers of freight services, despite some concerns over regulatory headwinds, especially in the healthcare sector. There was a consensus that whilst a key function of AI would be to enable better decision-making based on the terabytes of data being generated by movements of products, containers and transport assets around the world, predictive capabilities will become increasingly important. One panellist mentioned that at anyone time, 50% of their containers were static. AI would play an important role in increasing the velocity of products throughout the system by identifying bottlenecks as well as helping secure locations and nodes vulnerable to theft.

Throughout the session, the impact of AI on staffing levels was frequently mentioned. What future would there be for new graduates entering the sector? Manners-Bell asserted that even though many process-based functions would be eliminated by new technologies such as AI, this would free up resources for more value adding roles, increasing the opportunities for talented individuals as well as enabling employees to become more focused on the development of customer solutions.

After an insightful and spirited discussion about AI’s opportunities and headwinds, the audience was asked for their opinion on the prospects for adoption of the technology. A majority thought that AI would become a useful tool in the evolution of the industry, whilst a sizeable proportion – including all the panellists – believed it would be transformational. Nobody believed that it would go the way of other technologies such as Blockchain which have ended up, for one reason or another, as more niche.

The session left everyone under no illusion that AI would play an important role in the future of an industry which was becoming increasingly dependent on the effective analysis of ‘Big Data’. The adoption of AI would evolve from being a competitive advantage for supply chain managers and logistics providers to an everyday business tool, integrated within processes. Whether the industry undergoes a root and branch transformation as a result is yet to be seen.

Author: John Manners-Bell

Source: Ti Insight

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