How AI Makes Supply Chains (unbelievably) Smart

By Kathy Leake, Founder & CEO, Crux Intelligence

In my most recent article for Fast Company, I talk about how crucial it is to have AI inside the supply chain to bring true intelligence, transparency and peace of mind into business processes. Our fulfillment algorithm at Crux Intelligence is designed to do just that, delivering “nudges” not just about prediction (what might happen next) but also, vitally, prescription (i.e. what to do about it before the whole system collapses). 

We are living through challenging times, especially in business. Even Amazon posted its first loss since 2015 due, in part, to supply chain challenges. If you’re in the retail industry you’ll know that there’s nothing worse, or more expensive in terms of penalties, than falling foul of OTIF (orders on time and in full). It’s clear, the old way of doing things just won’t cut it. Which is why we’re laser-focused on delivering a state of the art solution to ensure customers have a true real-time, and super smart, AI partner.  

Deeper Dive on Data

For Fast Company I highlight the post-pandemic shifts in human behavior which are here to stay – such as Click-and-Collect, where consumers order online and pick up their purchases at physical stores. As Deloitte’s researchers have noted: “At the onset of the pandemic in the United States, click and collect increased from 15% of orders to 25%, a 65% share increase.” I also talk about what it really takes to meet this level of demand, from re-orchestrating labor, store layout and the rapid digitization of the retail supply chain, which requires seamless integration between on-and-offline data sets.   

Digging deeper into the data issue, why are people still managing their businesses using static Excel spreadsheets? It’s not just inefficient but insane in 2022. 

As Boris Evelson, VP and Principal Analyst, at Forrester says, we have to move swiftly into a post-dashboard future. In a recent report, Evelson predicted that “Legacy BI technology is dead. Emerging technologies and techniques will deliver business insights more efficiently and effectively – beyond just dashboards.” The former strategic technology advisor at JPMorgan concurs with what I’ve been seeing in post-pandemic business processes: “The post-dashboard world of BI is impactful, actionable, augmented, unified, personalized, adaptive and pervasive.”

Total Transparency 

AI inside the supply chain can also support ethical practices, by making every node on the network transparent, and trackable. Dr. Veronica H. Villena, Associate Professor, W. P. Carey Supply Chain Management, Arizona State University, and her co-author, Penn State’s Professor Dennis Gioia, cover this subject in A More Sustainable Supply Chain (Harvard Business Review, Apr 2020). 

“In recent years a rising number of multinational corporations have pledged to work only with suppliers that adhere to social and environmental standards. The aim is to create a cascade of sustainable practices that flow smoothly throughout the supply chain, or as we prefer to call it the supply network. It’s an admirable idea but it’s been hard to realize and practice many of the [companies] that have committed to it have faced scandals brought about by suppliers that despite being aware of sustainability standards have nevertheless gone on to violate them.”

In my experience, embedded AI is a good solution to enable reporting at every stage of a supply chain, keeping everyone honest. AI can be tasked with monitoring all system and performance data towards mission critical goals. Through symbolic reasoning, it can identify patterns and outliers to ensure there are no anomalies in a highly complex networked system. But it’s not just good at flagging issues. By being computationally smart, AI can suggest new ways to tackle an issue – before it arises. Through its pervasive nature, able to process data insights rapidly, it has a much broader view of the situation overall too.  

Building a Solution for All 

At Crux Intelligence we’re committed to building next generation AI for businesses which deliver the kind of transparency recommended by Professor Veronica Villena. By embedding intelligence at every node of the network, we can deliver timely insights through predictive search, facilitating dialogue between the end user and Crux’s search application. Our auto suggest function predicts user queries based on the characters entered, simplifying the process – and also providing a set of cues to the user’s subconscious that the AI is paying attention to their business. 

Yes, this all contributes to the bottom line by saving time, money and increasing productivity. But it also makes for “better business” by releasing the executive towards higher level processing tasks, rather than the frustrating and tedious manipulation of data fields in a static worksheet. As such it also makes the job more interesting, leading to greater retention of staff. 

By being engaged in conversation with the AI-based system, there’s a sense of ease which enters the work day and a firm’s knowledge workers are no longer consciously, or unconsciously, living with dread regarding KPIs. For example, in CPG verticals, “Service as measured by the Customer” (SAMBC) is the crucial metric. Levels are measured through hitting (or missing) On-Time-In-Full (OTIF), Back-order levels, and Probability of on-time delivery. Algorithms are great at this kind of multi-data point complex calculation. 

Only by having an AI in the mix can one expect to truly stay on top of what’s going on – or about to go down regarding hitting deadlines, needing to “change lanes” or delivery time slots. Those types of decisions require deep knowledge across many data sets and, without AI, it can take days to realize an insight which will impact an SLA [Service Level Agreement]. With intelligence embedded in the system, executives can be presented with options, such as alternative fulfillment options, and reroute goods instantly, to avoid penalties.   

FOR READ MORE, CHECK OUT AI IN THE SUPPLY CHAIN BY KATHY LEAKE, FOUNDER/CEO, CRUX INTELLIGENCE IN FAST COMPANY.