Demand Forecasting Improves Supply and Demand Management
The accurate prediction of customer demand is a critical success factor for any business, and the stakes are especially high in the world of supply chain management. After all, if a company cannot predict how much of a product will be in demand, it risks either being stuck with excess inventory or losing out on sales due to stock shortages.
In recent years, artificial intelligence has emerged as a powerful tool for demand forecasting. By leveraging AI, businesses can more accurately predict patterns of customer behavior, anticipate changes in demand, and optimize their stock levels in real-time. As a result, AI-powered demand forecasting is becoming an essential part of supply chain management for many businesses. Not only does it help businesses to avoid the costly mistakes that can come from inaccurate predictions, but it also enables them to proactively respond to fluctuations in demand and keep their shelves stocked with the products that customers want.
A company called Blue Yonder is using AI to help businesses with demand forecasting, and they have seen impressive results. One customer, a large grocery chain in Europe, was able to reduce inventory costs by 20% and out-of-stocks by 60% after implementing Blue Yonder’s AI solution. The solution includes a feature that uses machine learning to automatically identify patterns in customer behavior and make predictions about future demand. As a result, the grocery chain was able to keep its shelves stocked with the right products at the right time, which led to happier customers and reduced churn.
Optimizing Routing and Delivery Logistics
Artificial intelligence is playing an increasingly important role in the world of logistics and supply chain management. By optimizing routing efficiency and delivery logistics, AI is helping to reduce costs and improve customer satisfaction. In particular, AI-enabled software is able to learn from historical data to identify patterns of customer behavior. This analysis allows businesses to anticipate customer needs and preferences, which can lead to improved routing efficiency and reduced delivery times.
Additionally, AI can help to identify areas of the supply chain that are susceptible to churn. By identifying these areas, businesses can take steps to prevent or mitigate disruptions, ensuring a smoother and more efficient supply chain. Ultimately, AI is providing significant benefits for businesses that rely on efficient delivery logistics. According to a study by McKinsey, successfully implementing AI-enabled supply-chain management has enabled early adopters to improve logistics costs by 15 percent.
One company that is using AI to improve delivery logistics is UPS. The company has developed an artificial intelligence platform called ORION, which stands for On-Road Integrated Optimization and Navigation. ORION uses data from GPS devices, weather reports, and traffic conditions to plan the most efficient route for UPS drivers. As a result of using ORION, UPS has been able to reduce fuel consumption by more than 10 million gallons per year. In addition, the company has cut its carbon dioxide emissions by 100,000 metric tons annually.
Machine Learning Improves Health and Longevity of Transportation Vehicles
As artificial intelligence and machine learning become more advanced, they are also having a positive impact on the health and longevity of transportation vehicles. In the past, supply chain disruptions and churn were two of the biggest challenges facing transportation companies. In fact, companies today are facing huge supply chain problems due to the unexpected demand caused by COVID-19.
By using machine learning to predict demand and optimize routes, AI is helping to reduce these disruptions and improve the efficiency of transportation networks. In addition, machine learning is also being used to diagnose problems with vehicles before they occur, greatly reducing the need for repairs and downtime. As a result, AI is playing a vital role in improving the health and longevity of transportation vehicles.
AI Produces Insights that Increase Efficiency and Profitability in the Supply Chain
The use of artificial intelligence in the supply chain is providing businesses with insights that are leading to increased efficiency and profitability. In particular, AI is being used to improve demand forecasting, identify problems, provide real-time updates, assist production, and control quality. As a result, businesses are able to reduce costs, improve customer satisfaction, and increase profits. In the future, AI will continue to play a vital role in the supply chain, providing businesses with the insights they need to thrive. The graph below shows the various insights that AI offers to increase efficiency and profitability in the supply chain.