The pandemic has put supply chains once again on the back foot. They need the ability to adapt, make quick and decisive changes, alongside having traceability built into all processes. This defines supply chains that can cope with new regional lockdowns and other fast-moving disruptions. Fortunately, the barriers to adopting technology that can support this are now lower than ever. Artificial Intelligence, which has been an essential part of supply chain survival through COVID-19, is becoming increasingly accessible. Low cost options are available, and AI can be adopted piecemeal to fit the needs and resources of a business. In fact, supply chain and manufacturing are the two best industries for cost reduction through AI, a 2019 McKinsey report found. Laid out here is the path for adopting automation and AI, and the benefits that are found at each step.
Step 1: Business Process Optimisation
The goal of automation is efficiency, so the first step in any adoption strategy has to be refining and shortening processes. Enter Business Process Optimisation (BPO), which starts the journey towards AI with a manual reassessment of processes and regular activities. Conducting an assessment of processes ensures that unnecessary steps are removed before any automation technologies are connected. This is important – these are the processes that hold businesses back in adapting to the ever-changing demands of the pandemic.
Step 2: Robotic Process Automation
After a number of processes have been slimmed down with BPO, the next step is Robotic Process Automation (RPA). This is the first introduction of technology, and can be summarised by the digitalisation of repetitive tasks. By automating simple processes with RPA there is a reduction in cost, reduced errors and the speeding up of otherwise time consuming processes. This is a big help when dealing with COVID-19, but will also add value long after the virus has disappeared.
Step 3: Narrow AI
Once set up, these automation processes are great at producing data. This makes the transition to AI the next logical step, as data is the lifeblood of AI. But this isn’t an all or nothing moment. There’s a common misconception that AI integration must be end-to-end from the start, requiring massive upfront costs, but really it should be initially brought in for specific tasks. These can range from inventory sorting to collating new orders. The benefits here are that these solutions are increasingly cost-effective for businesses of all sizes. This is where enterprise resource planning and automation connect, in the gathering and then use of data to optimise business processes.
Step 4: Full AI
The final step in this journey is completing a full AI transformation, in which many, if not all, areas are integrated into an AI system. Through this, real-time insights from across the business give opportunities to predict, adapt and capitalise on market changes or disruption before others have the chance. Employees are simultaneously freed up from monotonous tasks and also supported in their decision making through the predictive insights that AI can provide. The pandemic has affected almost every aspect of supply chain processes. The more areas AI optimisation can be brought in, the better prepared a business will be for disruption.
The time is now
There has never been a better, or more crucial, time to advance AI and automation in supply chains. The pandemic has made these systems essential for businesses survival. Due to COVID-19 half of UK manufacturers are already reviewing their supply chain processes, and a third are committed to changing them within a year. Relying on outdated processes guarantees future issues. For example, businesses often lose their end to end traceability when they have to make decisions outside of what their current systems can handle. AI powered systems mean decisions can be made quickly, with the proper review process, and stored for later reference. Supply chains without will sooner or later become bogged down with the consequences of the non-compliant shortcuts they were forced to take.
The cost of AI and automation is as low as it’s even been, which means now is the best time to start. The ability to be agile and build traceability into every process are essential ingredients in supply chain survival through the pandemic and beyond. These decisions are not just for the short-term; the benefits of AI and automation continue to grow as the technology becomes cheaper and more powerful. The return on investment compounds. The good news is that wherever you are on the path of AI, there is likely an opportunity to move further down.
The coming months will provide a host of new challenges for supply chains and manufacturers. By either taking the first steps into AI, or continuing down the path I outlined above, businesses give themselves the best chance of meeting these challenges head on.