The current global supply chain

Supply chains around the globe are still working to recover and adapt from the consequences the pandemic brought just a few years ago. Most of the changes and challenges that have been taking place, though, are the result of longer-term, pre-pandemic planning.

The United States continues to reduce its economic activity with totalitarian countries, instead investing heavily in reshoring activity in industries like manufacturing. Add geopolitical conflicts, strong consumer demand for goods and services and a challenged labor force – you have the perfect confluence of events for ongoing supply chain disruptions.

The role of supply chain professionals

Another part of the problem is that most supply chain executives don’t feel prepared to predict changes that disrupt their business. These professionals report spending nearly 14 hours a week manually tracking inventory and shipment data – a significant weekly commitment.

Given the myriad of factors at play, you might wonder if there is a way out (or ahead) of this, especially if you are in a similar position as many other supply chain professionals. Automation and AI-powered tools, backed by machine learning, could enable a more efficient and predictable supply chain across industries.

What is generative AI (genAI)?

GenAI is a type of AI technology that describes machine learning systems able to generate text, images, code or other types of content, usually in response to a prompt. Machine learning algorithms that power genAI models learn from the information they are fed – the more data the model is trained on, the more convincing and human-like its responses become.

A popular genAI tool you have likely heard of is ChatGPT. Known as a transformer-based model, ChatGPT is skilled in understanding the relationship between information like words and sentences, enabling them to comprehend the structure and context of language.

Other models exist for specific tasks and purposes, including output authenticity verification, data synthesis, producing original insights and image generation. For businesses, one of the most compelling benefits of genAI is efficiency – it can help automate tasks, enabling employees to focus their time and energy on higher priorities.

How can genAI benefit supply chain professionals?

Many supply chain professionals lack a predictive view of supply and demand from real-time data. Because of this data deficiency, companies operate as though they have no data at all, with leaders often making decisions based on their gut.

Today, supply chain leaders need actionable predictive insights for decision-making more than ever. GenAI can fulfill that need. Since genAI tools learn and teach themselves, they can learn about the nuances of a company’s supply chain ecosystem to refine and sharpen their analyses over time. Processing large sets of data and an infinitely complex set of variables is a strong suit of genAI tools and one that can save supply chain professionals valuable time.

New supply chain capabilities with genAI

What new capabilities can be unlocked for supply chain professionals with genAI tools? Let’s explore a few of the opportunities.

1. Better Forecasting

GenAI can take real-time data from variables like production, shipping, weather patterns, labor issues and materials shortages, and provide conversational answers to critical planning questions.

Supply and demand are constantly fluctuating. With predictive analytics, genAI tools can help companies better anticipate potential bottlenecks and develop plans to respond quicker to issues and market fluctuations.

2. Inventory Management

Automation and AI-enabled tools can analyze inventory data for improved optimizations across profit, ordering, warehouse storage and more.

An example of this technology in action is automation available through SupplySight. SupplySight is R.S. Hughes’ end-to-end inventory management program that helps optimize nearly every aspect of your supply chain, from planning to vending solutions and warehousing.

Maintaining ideal stock levels is both critical and challenging. But with SupplySight’s intelligent automation capabilities, customers never worry about over- or under-ordering. This helps save money, warehouse space and supply chain professionals’ valuable time.

3. Optimizing Logistics

The conversational capabilities of genAI tools can be of great use when it comes to logistical planning. From optimal warehouse routes to designing efficient delivery routes for drivers, the possibilities are near limitless. Plus, as a tool learns over time from a user’s inputs, its recommendations should become more tailored to the company’s needs.

Roadblocks to genAI transforming the supply chain

Lack of Supply Chain Leadership

“If it were easy, everyone would do it” is a popular adage that could apply to businesses’ adoption of genAI tools. Change is never easy, and large-scale organizational change can take years to fully achieve. But the risk of being left behind is an even tougher reality to face.

Companies need the right supply chain leadership to introduce new automation capabilities and AI-powered tools. Without capable leaders, transformation could stagnate.

Data Fragmentation

Another potential roadblock is data. With so much data flowing in across companies’ supply chains from different systems, silos can easily form, leading to disconnected data sets. This increases the risk of duplication and misinterpretation because a holistic view of the company’s supply chain is absent.

With genAI, the more accurate the inputs, the better the outputs. Consolidated and organized data enables AI-powered tools to provide more accurate recommendations for a company. If these tools are only fed a fraction of the bigger picture, their outputs are far less useful.

At its core, supply chain management is all about optimization, efficiency and cost control. With the greatest benefit to businesses of machine learning being efficiency, it only makes sense that supply chain leaders around the world are starting to adopt these tools.

Post-pandemic impacts and government trade decisions continue to be felt across the supply chain. GenAI tools can provide solutions that supply chain leaders need to ride the waves of these changes and even get ahead of them.

Read more about R.S. Hughes’ inventory management automation capabilities.