Every business in the world has a budget which dictates how they can operate their business. If a business needs availability in their budget to take on new tasks or explore new opportunities then the business either has to cut costs or increase revenue. That’s basic budgeting 101.
Artificial intelligence has become something of a hot topic in recent years. The technology is advancing rapidly and the business world is just beginning to grasp how this technology can help their business. Artificial intelligence, or AI, can be seen in many different business processes from chat bots that manage customer support to AI that triages emails and sorts attachments in the appropriate storage directory.
However, one of the biggest potential benefits for businesses when it comes to AI may be seen in supply chain management. The supply chain is the life source of any business that works with physical products and, as a result, it requires a lot of man hours and resources to operate effectively. But what if artificial intelligence could improve supply chain efficiency and reduce costs? How could this change the way the world does business?
Improve Shipping Efficiency
The cost of shipping product is one of the top 4 greatest costs in any supply chain. Of course, it’s one area where businesses can’t exactly begin cutting costs. Products need to get from the business warehouse to the customer and there is really no way around that. However, there is always an opportunity to improve shipping efficiency and make the most of every dollar.
Artificial intelligence can quickly analyze and provide solutions for the complex distribution challenges faced within any supply chain. With the help of AI, businesses can have automated responses to certain triggering factors within their supply chain. Instead of waiting for the opportunity to be seen and reviewed by a person, the artificial intelligence can immediately identify a shipping improvement opportunity that could improve efficiency, cut costs, and boost customer satisfaction. Not only can this lead to overall lower costs, but it could also help to increase revenue as satisfied customers return to do business again.
Even finder details like the routes drivers take to their destination can be optimized to reduce budget items like fuel costs or overtime pay for drivers. Every small improvement in efficiency can add up quickly and help business reduce supply chain costs.
Identify Patterns and Plan for Predicted Customer Behavior
Many people incorrectly believe that artificial intelligence is some kind of supernatural magic power. The reality is that artificial intelligence learns from historic information and learns to recognize patterns better and faster than human counterparts. One great example is how AI was trained to recognize giraffe torsos. Using images and historical data, the artificial intelligence platform was able to learn and identify patterns that could quickly analyze images and identify giraffes.
So what do giraffes have to do with supply chain management? Just like an artificial intelligence program can use data to recognize animals in the wild, it can also learn to spot patterns in order history and customer behavior to better plan for expected ebbs and flows in business. Once businesses can recognize these patterns, the decision makers can plan accordingly by increasing staff levels, boosting production, or better customizing specific customer relationships to predict a need rather than respond to one.
During slower predicted times, businesses can cut back on production to ensure there isn’t an abundance of surplus inventory and drivers waiting to take out shipments that aren’t required. Artificial intelligence can make all of this a reality.
More Data, More Accurate Forecasting, Done Faster
An artificial intelligence platform and a human can both sift through mountains of data and come to the same conclusion. The difference is the amount of time required to do this. A human may take months or even years to sort through the vast amounts of small data points available. However, artificial intelligence can do this much more quickly. Not only can this identify smaller points of data that may have gone ignored by the human employee, it now frees up employees to do tasks where their efforts can be more valuable.
As a business garners more and more information about their processes, customers, and supply chain; this data can be fed into the artificial intelligence system and analyzed quickly to make performance adjustments. While these adjustments may be small, each one can help lead to more accurate forecasting. Every bit of data can ultimately play a role in working to reduce supply chain costs overall.
Building More Efficient Supply Chains
Clover AI Direct gives businesses the ability to leverage artificial intelligence and improve their operations. In addition to reducing supply chain costs, there are countless other benefits to introducing AI into supply chain management. To learn more about how artificial intelligence is improving supply chains around the world, contact Clover AI Direct today.