“To me, supply chains of the future will be steered by human creativity but powered by AI and intelligent technologies.”

That is quote comes from Deloitte’s Subit Mathew, who I had the pleasure of talking to in a recent Future of Supply Chain podcast. It was clear from our conversation that generative AI is the logical next step to automate supply chains and empower employees to become far more efficient than they are today with traditional tools.

What Companies Should Ask Themselves Before Deploying Gen AI

AI can be a game changer for supply chains drowning in data. The challenge is to put this data into the business context of the specific job function or job at hand, to help automate mundane, repetitive jobs and empower the worker of tomorrow with the right information, predictions and suggestions.

As Subit explained, “AI is all about doing things that you did before differently. And doing different things that you didn’t even know how to do before!”

Subit believes companies need to segment their AI strategies into three different categories:

Improve efficiency to do the things it does today in a different, more accelerated fashion.

Improve the user experience to become more intuitive and provide contextual information.

Deliver new processes and innovation previously not had in the organization.

“A lot of companies are looking at establishing AI Center of Excellence, which really look at it from multiple perspectives,” said Subit.

This involves answering several questions:

• What is the right governance model you want to put in place around what initiatives do you even prioritize?
• How do you prioritize the use cases you want to go after?
• How do you quantify the value of what you want to go after?
• What is the technology fabric that you’re going to use to accomplish this?

“This is the value of where an ERP platform such as SAP comes in,” said Subit. “If you combine them with some of the large language models out there, it opens itself up to doing really remarkable things.”

Will AI replace humans?

This is a question that comes up in every discussion about any game changing technology. I heard a great comment recently, “AI will not replace humans, but humans that leverage AI, will replace humans that don’t use AI!”

Subit tends to agree with this summation believing that effective deployment of Gen AI, or AI, in general, is about how to augment the workforce to do things better.

“Can you free up capacity for folks to focus on more value-added activities and let the platform run with everything else?,” he asked.

Generative AI is not unlike technological advances that came before – those who leverage the technology will be poised for success, and new, more value added, jobs will be created. Embracing changes like this can be difficult, but if one wants to remain relevant then embrace change they must.

What does this mean for supply chains?

AI is predicted to take supply chain resiliency to the next level by leveraging the vast amount of data now available across the enterprise.

When AI tools are added into every layer of the supply chain it will yield hyper-predictive and efficient processes that will change the way goods flow from suppliers, through the factories and warehouses to the consumer.

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Further, AI will allow users to leverage insights, recommendations, and automation to predict events – making more informed decisions and ultimately modernizing functions across the supply chain.

As an example, having a complete picture of the daily demand is essential to optimize profitability, deliver high customer service levels, and enable accurate supply planning. AI-powered demand sensing algorithms can produce accurate short-term forecasts daily by efficiently parsing high volumes of diverse data which was impossible to achieve with traditional forecasting methods.

ZF Friedrichshafen, a global technology innovator in mobility for the automotive industry, utilizes demand planning capabilities in SAP Integrated Business Planning to quickly anticipate and adapt to shifting demand. By using AI embedded within SAP IBP, ZF Friedrichshafen decreased its forecast turnaround time by 92%, freeing planners from time-consuming, repetitive tasks. As a result, the company now enjoys flexible control over levels of the supply chain, including location, product, channel, and customer.

“Imagine if you can actually take your Integrated Business Platform, put AI on top of it and be able to simulate any and all supply chain events that could happen,” said Subit. “You have a set of answers before it actually even happens.”

Listen to the full interview with Subit Mathew, on the Future of Supply Chain podcast here.