Businesses are finding that artificial intelligence and automation are crucial for streamlining operations and enhancing decision-making in today’s complex supply chain landscape.
In an era marked by dramatic shifts in supply chain dynamics, businesses are increasingly turning to artificial intelligence (AI) and automation to streamline operations and enhance decision-making capabilities. Recent insights reveal that advancements in these technologies are proving transformative across various sectors, with rising levels of engagement noted in a study released by SAPinsider.
The pressure on supply chains has never been more pronounced, as companies grapple with the complexities of managing diverse product portfolios, fluctuating demand and supply, and navigating geopolitical risks. A McKinsey report highlights that organisations embracing AI in their supply chain management can realise significant advantages over their competitors—reportedly improving logistics costs by 15%, inventory levels by 35%, and service levels by 65%. This data underscores the importance of investing in resilient and adaptable supply chains.
According to SAPinsider, 47% of surveyed companies recognise the growing significance of AI and machine learning (AI/ML) in their operations, with 43% acknowledging its escalating role on corporate agendas. During a recent SAP-powered webinar, Mindy Davis, Global VP of Product Marketing and Digital Supply Chain at SAP, expressed that the integration of new technologies, including AI and advanced analytics, is steering companies towards developing more agile and resilient supply chains.
Prominent examples of companies capitalising on these technologies include Microsoft, which has leveraged AI in its digital supply chain. Dhaval Desai, Microsoft’s Group Engineering Manager, elaborated on this during the webinar, explaining how data science models, generative AI, and machine learning come together to forecast demand for the cloud, ensuring planners receive accurate insights necessary for efficiently catering to consumer needs. Microsoft’s operations are further enhanced by using SAP’s ERP platform, particularly with solutions like SAP Integrated Business Planning (IBP).
The IBP, equipped with AI capabilities like master data anomaly detection, operates in a human-assisted mode to ensure accuracy. It examines master data for patterns and anomalies, flagging potential errors for human intervention. Additionally, the AI-enabled virtual inspection tool under SAP’s Digital Manufacturing monitors quality, further improving productivity.
The practical applications of AI are profound. SAPinsider highlights that the technology facilitates real-time data integration and predictive analytics through the adept knowledge of CloudPaths, which enhances operational efficiency and decision-making processes. The mention of data cleansing and harmonisation is also critical; accuracy in real-time information is paramount for training AI models effectively, ultimately enhancing responsiveness to market changes.
Looking at recent developments within the European ERP landscape, the acquisition of alltrotec by Forterro in September 2024 serves as another testament to the rising prominence of AI in business operations. Forterro aims to integrate alltrotec’s advanced planning system (APS) capabilities and AI and IoT solutions into its ERP offerings, which is expected to generate benefits for both Abas customers and other users within the Forterro ecosystem. Marcus Pannier, Regional President Central Europe at Forterro, highlighted the unique competitive edge this integration could deliver, emphasising how it sets new benchmarks for efficiency and future preparedness in production processes.
This collaboration is particularly timely; SAPinsider’s research indicates that 79% of companies are currently deploying or planning to implement AI in their supply chains. The amalgamation of alltotrec’s capabilities with Forterro’s existing systems aims to foster manufacturing agility, thereby improving productivity, optimising logistics, and enhancing customer satisfaction through better resource allocation and order fulfilment processes.
As the landscape of supply chain management continues to evolve, the focus on AI adoption appears to usher in a new era of operational resilience and efficiency, with companies keenly exploring the metrics that define success in this domain. A forthcoming SAPinsider research report, set for release in February, will delve deeper into the motivations behind AI integration into supply chains, as well as the critical capabilities necessary to sustain its efficacy.
In summary, the integration of AI technology within supply chain processes is not merely a trend; it represents a fundamental shift in how businesses organise their operations. With a concerted focus on employing these innovative tools, organisations are positioned to enhance decision-making, improve efficiencies, and adapt swiftly to the demands that lie ahead.
Source: Noah Wire Services
- https://sapinsider.org/blogs/sap-ai-powering-the-digital-supply-chains/ – Corroborates the integration of AI into SAP Digital Supply Chain solutions to enhance ‘design-to-operate’ processes, including demand forecasting, manufacturing, and logistics.
- https://sapinsider.org/technology-insights/give-your-supply-chains-a-boost-with-data-ingestion-advanced-analytics-and-ai/ – Supports the use of data ingestion, advanced analytics, and AI in supply chains to improve performance and visibility, aligning with Industry 4.0 concepts.
- https://sapinsider.org/blogs/sap-sets-vision-for-autonomous-supply-chain/ – Details SAP’s vision for an autonomous supply chain using AI technologies, including optimization models, predictive analytics, and generative AI for planning and decision-making.
- https://sapinsider.org/map/harnessing-the-power-of-ai-for-digital-supply-chains-2/ – Highlights the benefits of AI-enabled supply chain management, such as improvements in logistics costs, inventory levels, and service levels, as reported by a McKinsey study.
- https://sapinsider.org/blogs/sap-ai-powering-the-digital-supply-chains/ – Explains the role of SAP Integrated Business Planning (IBP) in using AI for demand forecasting, anomaly detection, and enhancing operational efficiency.
- https://sapinsider.org/blogs/sap-sets-vision-for-autonomous-supply-chain/ – Discusses the integration of AI and machine learning in SAP’s supply chain solutions, including generative AI for complex business transactions and what-if scenario simulations.
- https://sapinsider.org/technology-insights/give-your-supply-chains-a-boost-with-data-ingestion-advanced-analytics-and-ai/ – Emphasizes the importance of accurate data for training AI models and the role of advanced analytics in enhancing supply chain operations.
- https://sapinsider.org/map/harnessing-the-power-of-ai-for-digital-supply-chains-2/ – Mentions the recognition by 47% of surveyed companies of the growing significance of AI and machine learning in their operations, and its escalating role on corporate agendas.
- https://sapinsider.org/blogs/sap-ai-powering-the-digital-supply-chains/ – Describes how SAP’s AI-powered solutions, such as SAP S/4HANA, enhance resource management, lower inventory holding costs, and boost supply chain efficiency.
- https://sapinsider.org/blogs/sap-sets-vision-for-autonomous-supply-chain/ – Highlights Mindy Davis’s statement on the integration of new technologies, including AI and advanced analytics, to develop more agile and resilient supply chains.
- https://sapinsider.org/map/harnessing-the-power-of-ai-for-digital-supply-chains-2/ – Supports the collaboration between SAP and Microsoft in leveraging AI for demand forecasting and operational efficiency in digital supply chain processes.
- https://sapinsider.org/map/harnessing-the-power-of-ai-for-digital-supply-chains-2/ – Please view link – unable to able to access data
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