How to build a smarter supply chain while relying on AI

March 24, 2022
"The key is a data-driven supply chain where we combine public data, community data and private/enterprise data and then add artificial-intelligence algorithms to predict and simulate outcomes."

Managing the supply chain has always been a tricky business. Now on top of the typical stress there is a global pandemic, labor shortages and supply shortages. It can easily become a logistical nightmare, but with the proper tools and preparation it does not have to be. 

Supply chain disruptions have been at the forefront of the world news for most of the global pandemic.

As people stayed home, spending habits became hard to track and, with labor and staffing shortages, companies weren’t able to produce as much they needed to meet consumer demand. 

Preparation and utilization of various tools is the best way to set a business up for success to navigate supply chain disruptions.

The key is a data-driven supply chain where we combine public data, community data and private/enterprise data and then add artificial-intelligence algorithms to predict and simulate outcomes.

Here are the top ways that data and AI can support you in navigating supply chain disruptions: 

  1. Greater visibility: Pooling together public data, community data and enterprise data provides visibility for businesses to see how their supply chain fits into the broader environment by connecting contextual data from public sources such as weather, risk or sustainability-related data. This visibility allows businesses to take a step back and look at the bigger picture to see where they fit in and where issues may be stemming from, which gives them the opportunity to problem solve before issues arise. 
  2. Flexibility and ability to adapt: AI algorithms can utilize this pooled data to simulate various hypothetical situations (ex: shortages and delivery issues) to help with problem solving before the problems even arise. Being able to see every possible situation can enable business leaders to problem solve and adapt to supply chain issues. AI can be a great business partner in this sense, because instead of a person having to sit down and try to ideate every possibility, the algorithms can pull from a large amount of data and do the work for you.
  3. Risk management: There is no good time for a supply chain crisis, so being able to identify potential issues, mitigate early and reassess often is imperative. Any sort of supply shortage, delivery issue or weather crisis can drastically affect sales during this critical time, which many companies rely on for a significant amount of their revenue. AI can help provide additional insight from new data sources allowing companies to judge the ramifications on inventory and delivery of key goods, automating ways to notify key customers and partners, or figuring out alternative means of storage and supply, like with pop-up warehouses.
  4. Creates efficiencies: There was a huge shift in consumer demand during the pandemic and businesses need to be prepared to meet those widespread demands. Utilizing AI can help create efficiencies during these high-volume times in shipments, ordering products on time and even same-day delivery to the consumer. Utilizing AI to forecast product demand helps with accuracy, which in turn can lead to lower inventory levels. AI can also help with fleet routing and determining the best transportation route, which, in turn, leads to a reduced number of vehicles and miles needed. 

Preparation is key for the supply chain, but what these past two years have shown is that it is incredibly difficult to prepare for the unexpected. The key to navigating these supply chain challenges is pooling data from multiple supply chains and then allowing AI to create algorithms that can predict, essentially, every potential circumstance out there. These algorithms enable businesses to prepare for every potential. 

By Hans Thalbauer, managing director for supply chain and logistics at Google Cloud