Role of AI and IoT in Supply Chain

Find the Role of AI and IoT in Supply Chain in 2021

Several vendors, analysts and systems integrators look at new disruptive technologies such as IoT, AI and block chain individually. The real value to the supply chain comes from combining these technologies. However, here we will only focus on the impact of AI and IoT on supply chain management. Learn more about – The Role of Block chain in the Supply Chain.

As digitization continues to radically transform the landscape for global supply chains disruptive technologies are paving the way for true end-to-end digital supply chain visibility. Organizations need to ensure they have an end-to-end digital foundation or backbone in place. The digital foundation allows companies to seamlessly exchange electronic business transactions with 100% of the trading partners in a digital business ecosystem. Once the foundation is in place, the companies can leverage the combination of AI and IOT to enable an autonomous supply chain.

Artificial Intelligence 

Artificial intelligence derives insights from information moving across the digital business ecosystem. Whether analyzing transaction information to determine the best performing trading partner or analyzing IOT centre information to determine if a piece of equipment is about to break down, AI helps companies optimize and drive efficiencies across an end-to-end supply chain.

Supply chains deal with powerful and big data. With the penetration of AI, the capability to analyze and get value out of its use cases are now possible. It would apply to areas like forecasting and demand sensing as it will give a better picture of the demand and preferences of the end customer. A major challenge with AI is dealing with poor data quality. To apply AI, supply chains managers need to have pre-classified data sets. 

AI is one such technology that can continuously and autonomously detect, investigate and respond to attacks in real-time. Supply chains around the globe have allowed international trade to thrive, the recent pandemic has also shown us just how fragile they can be. It’s a good practice to remember that supply chains are only as strong as their weakest link. Supply chains operate in highly complicated environments and hence it is important to mitigate supply risks and prepare yourself for the future.

Another disruption that can bring supply chains to a grinding halt is cyber-attacks. The smaller suppliers are targeted first and then the attackers will pivot to larger organizations. It can disrupt the production or distribution process. There are certain risks that an organization faces when dealing with supply chains. Learn more about: Risks in Supply Chains. AI strengthens the resilience of cyber environments by identifying vulnerabilities. 

Every time an organization introduces a new element or changes an ingredient, it introduces an element of change into the organization. This change is to be brought forward and implemented in all of the policies and procedures across the company, this however creates blind spots and vulnerabilities. For instance, a company is either bringing a new product to market or substituting an ingredient or element. These changes also need to be reflected in the policies and purchasing systems and in things like accounts payable and not just the good itself.

Internet of Things

IoT allows companies to create a digital twin of a piece of equipment or serviceable asset. For instance, IoT sensor information can be leveraged to not only identify shipment location while moving through the supply chain but also monitor shipment condition. We can also remotely monitor the condition of the track systems.

The Implication of IoT

Shipment Tracking 

Companies can use IOT driven track and trace systems to connect shipment and assets throughout the supply chain. All shipment and product movements can be monitored in real-time. Data from sensors and other IoT devices can be augmented with other supply chain data such as warehouse and transactional information to build more connectivity. 

Shipment Monitoring

This solution will help deliver condition-based monitoring to supply chain operations. Every aspect affecting goods in transit can be monitored in real-time. This enables the SCM to take immediate corrective action if any deviations are reported. It provides much greater control over the shipment of perishable and high-value goods with high levels of transparency and supplies chain efficiency. At the same time, it reduces the waste and damage of products in the supply chain.  

Shipment Insights

It combines IOT data management with AI and machine learning to bring end-to-end visibility and continuous improvement to all parts of the supply chain beyond simple track and trace solutions. This holistic solution uses the captured data to apply predictive analytics to areas such as planning, route optimization and predictive maintenance. 

Another disruptive technology that drives innovation across the supply chain is blockchain.

Blockchain in its simplest form is a distributed ledger that archives information from across the extended enterprise from a supply chain point of view. The most popular use case relates to track and trace and knowing the origin of goods or raw materials. An autonomous supply chain will help companies establish a highly intelligent connected self-aware and trusted environment.

An environment that leverages deeper insights to supply chain performance to refine business processes improve traceability of goods and record and secure an archive of all digital interactions between a company and its trading partner. Learn more about How is block chain revolutionizing the supply chain industry.