The process of purchasing raw inventory and eventually turning it into a final product that is sold to a customer is referred to as the supply chain. If you have an efficient supply chain, it can help to reduce your operating costs, increase the speed at which you can deliver a final product and help to make your company more efficient. Unfortunately, managing a supply chain efficiency can be quite complicated as there are always variables and factors that are changing along the way.
Today, companies that are looking to improve their supply chain efficiency and production processes should consider using an AI-based supply chain planning program such as Logility.com. These services can offer a variety of different benefits that can help ensure your company identifies ways to improve your supply chain and make your organization as efficient and effective as possible.
8 Ways AI-Based Supply Chain Make Your Business More Efficient
1. Predict Demand
One of the most important parts of any supply chain planning process is being able to predict the demand for your products from consumers. Having the means to accurately predict demand can help your company in several ways.
When you are able to predict how many orders will need to be filled, you can be assured that you will have the staff and materials necessary to produce products and fulfill orders on time. It can help you retain a good reputation with customers and maximize revenue potential.
2. Reduce Supply Chain Cost
Accurate prediction of demand can also help you reduce operating costs. The supply chain is the lifeline of a business, which works mostly with physical products. Thereby, it needs various resources and person-hours to intervene properly.
However, a common mistake that many businesses make when they are not able to predict demand. They expect to fulfill more orders than are actually necessary. This can then lead to over-hiring, purchasing too much inventory, and experiencing additional waste and storage costs. With accurate predictions in the supply chain, you will be able to avoid many of these costs.
Moreover, the impact of artificial intelligence on supply chain costing is more than just predictions. Such as an AI-enabled supply network enhances shipping efficiency, predicts customer behavior, identifies patterns, makes faster decisions and eventually, creates stronger supply chain efficiency designs.
3. Improve Risk Mitigation
Manufacturers often lack tools to assess, identify and reduce risks quickly. It is because they don’t have access to certain data to make things work. In fact, the tools they use are inaccurate and fail to give a thorough perspective about the risks, their probability and severity. They are also unable to predict when, where and how those risks can impact the business operations.
Thankfully, advanced AI in supply chain management has solved the problem. It can easily identify risks and improve risk mitigation in real-time using its algorithm.
4. Identify Inventory Needs
An AI-based supply chain assessment will ensure that you are aware of your inventory needs at all times. The software and technology can be linked to your real-time inventory reports and then coordinate inventory reports that will identify when additional inventory needs to be ordered.
It will also give notice if inventory in your systems is nearing expiration and needs to be used quickly before it goes to waste. Additionally, The products could also help you identify areas in which you can reduce costs with vendors by negotiating more favorable rates.
5. Review and Improve Production Processes
A major part of the supply chain has good processes in place. The entire process of turning a raw good into a deliverable product requires many phases. This includes sales and marketing, inventory purchases and management, manufacturing and production, and ultimately packaging and order fulfillment.
In short, AI-based supply chain programs can help you assess your current processes to determine if there are areas that are inefficient. It can then help you address these bottlenecks and find a way to speed up your processes. Consequently, it can make you much more efficient overall.
6. Manage and Improve Working Capital Position
Ultimately, the use of these AI programs can also help you better manage your working capital. The working capital of a company is extremely important and needs to be managed properly. Even profitable and growing companies can find themselves in challenging working capital positions.
Moreover, the use of an AI program will help you assess and predict future working capital. It can also help you find ways to improve it by receiving extended payment terms on inventory, reducing waste and improving sales and collections.
7. Smart Shipping Technology
No doubt, artificial intelligence continues to advance and upgrade through new technology. The benefits of incorporating AI technology into shipping give the power to improve your predictive capability. Consequently, it makes the business operation more efficient.
AI is influencing the shipping industry in many ways. That includes detecting natural disasters, weather conditions, road conditions etc., in order to give accurate arrival times for your shipments. Further implements provide automated shipping process, real-time analysis and improve scheduling.
In this way, you can accurately manage the warehouse and ship products in the given time using machine-predicted shipping time.
8. Receive Real-Time Feedback
Having access to real-time information about your business is always important. Managers and owners will be able to use the most current information to make informed decisions for their business. When you use an AI-based supply chain program and service, you are going to consistently have access to information about your supply chain, working capital, inventory, staffing trends, and other information.
This will help ensure you are able to make the right choices when the time comes. Eventually, you will know if the business is able to adapt and take advantage of situations to improve your business.
Finding ways to improve and manage your supply chain is extremely important. As there are plenty of challenges that can come with establishing and improving your supply chain, taking advantage of professional AI-based supply chain planning services is a great option. These services can offer a range of benefits that will help your business operate more efficiently.