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Perspectives
Artificial intelligence (AI) in supply chain management
Combatting complexity in modern supply chain management
We live in an era when supply chain disruptions are increasingly common, global, and complex. How can AI help companies solve these modern supply chain management challenges for a competitive edge? Discover the transformative capabilities of AI and how supply chain managers can use it to preempt disruptions and optimize operations.
The state of modern supply chain management: Challenges abound
Entropy is “a measure of change, the decline from order to disorder in a system.” The playwright Anton Chekhov once said, “Only entropy comes easy.” In today’s modern world of global supply chain management, entropy can not only come easily, but it can also disrupt goods being moved around the world in major ways. The companies thriving in this complex and chaotic supply chain environment are those that are experts at managing entropy. They look to AI to help keep order amid supply chain management disorder and challenges.
- Recent monumental events with enormous complexity: The Russia-Ukraine war and the COVID-19 pandemic, to name two, triggered fundamental shifts in demand and supply, price volatility, and labor shortages.
- Shifting policy and power in the geopolitical arena: Companies are ramping up efforts to reshore manufacturing despite labor availability being an obstacle. They’re navigating stricter regulations, such as the Uyghur Forced Labor Prevention Act (UFLPA), for fair labor practices and immigration.1
- Natural disasters and other impacts from climate change: Not only humans are being affected; corporations working on energy transition and greenhouse gas emissions are being affected due to new regulations and pressures from stakeholders.
- The future of work: Tens of millions of people are apt to hold jobs in which their roles will be augmented by AI, leading to a rise of “purpose,” new hybrid work models, upskilling for better opportunities, increases in productivity, and more satisfying employment relationships.
How can companies execute new AI capabilities in supply chain management to have a leg up on their competitors and realize greater customization, improved service levels, and greater economies of scale?
Managing a modern supply chain: Utilizing AI to combat complexity
AI in supply chain management: A critical tool to combat entropy
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What if AI could proactively identify potential quality issues in manufactured goods?
A major automobile manufacturer’s challenge was trying to use a high volume of raw data in a manual review process to sort out customer feedback on potentially hazardous maintenance issues. Using a new AI solution, the company was able to develop an alert system to identify issues like these, which led to multimillion-dollar savings.
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What if AI could make the manufacturing workspace safer for employees?
A leading industrial products manufacturer had the bold ambition to have zero serious incidents and fatalities across the global plants. A safety control powered by computer vision helped generate predictive insights and shape targeted safety campaigns to drive safety incidents to zero.
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What if AI could help predict and prevent maintenance failures?
A company delivering millions of packages daily used Internet of Things technologies—such as ultrasonic inspection devices and vibration and temperature sensors paired with AI/machine learning. With more than 30 use cases, the expected result is almost 5% capacity unlock and a potential 20% to 30% reduction in equipment downtime.
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Five steps for supply chain organizations to develop an AI strategy
These critical steps can facilitate a comprehensive AI approach in supply chain management:
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Want to revolutionize your supply chain with AI strategies that combat disruptions and drive seamless operations? Connect with us to learn more about how we can tailor AI solutions to optimize your supply chain to combat supply chain entropy and boost efficiency.
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Partner
Supply Chain & Network Operations
Deloitte Consulting LLP
Partner
Supply Chain & Network Operations
Deloitte Consulting LLP
Specialist Leader
Supply Chain & Network Operations
Deloitte Consulting LLP
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Senior Manager
Supply Chain & Network Operations
Deloitte Consulting LLP
Senior Manager
Supply Chain & Network Operations
Deloitte Consulting LLP
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Endnotes
1 From US Customs and Border Protection: “The Uyghur Forced Labor Prevention Act (Public Law No. 117-78), also known as the UFLPA, directs the Forced Labor Enforcement Task Force to develop a strategy for supporting enforcement of the prohibition on the importation of goods into the United States manufactured wholly or in part with forced labor in the People’s Republic of China, especially from the Xinjiang Uyghur Autonomous Region, or Xinjiang.” Accessed October 2023.
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