Machine Learning & Artificial Intelligence

Group Assignment

Topic: AIML in Supply Chain

Submitted to: Mr. Neil Harwani & Prof. Balakrishnan Unny R

Submitted By:

Sr. No. Roll No. Name

1. 191318 Bhanu Pratap Singh Rathore
2. 191320 Deesha
3. 191330 Mansi Chhabra
4. 191331 Shah Meet Alkesh
5. 191336 NiliVachhani

Batch: MBA FT (2019-21)

Date of Submission:9th April, 2021

Institute of Management, Nirma University

Table of Contents
1. Overview............................................................................................................................................3

1
2. Historical happenings........................................................................................................................5
3. Current happenings...........................................................................................................................6
4. Future recommendations..................................................................................................................9
5. Companies using AIML in Supply Chain Management...............................................................11
(1) Microsoft Corporation – Technology...........................................................................................11
(2) Alphabet Inc.– Internet Conglomerate.........................................................................................11
(3) Amazon.com – eCommerce...........................................................................................................11
(4) Rolls Royce – Automotive..............................................................................................................12
(5) UPS..................................................................................................................................................12
(6) Marble.............................................................................................................................................12
(7) Procter & Gamble – Consumer Goods.........................................................................................12
(8) Lineage............................................................................................................................................12
REFERENCES........................................................................................................................................13

1. Overview

2
Machine Learning and Artificial Intelligence are assisting people, groups and businesses achieve
their core goals, acquire actionable insights, make important selections, and create exciting, new,
and revolutionary services and products.

Talking specifically about the Supply Chain domain, broadly speaking what AI and ML does is
making it possible to find out patterns in supply chain data through counting on algorithms that
are quick in pinpointing the maximum influential elements to a supply networks’ achievement,
even as constantly learning inside the system.

Figure 1: Overview of AI and ML in Supply Chain

AI may be applied throughout the supply chain activities, i.e., from early stages of planning to
production, warehouse imports and exports, distribution, in communication and logistics; to
improving the consumer enjoy. AI can optimize supply chains by supplying hassle-primarily
based unique solutions within these levels. AI answers can attention on any given problem that
arises during data handling, evaluation in finance, operations and logistics planning and or in
management of inventory.

In this age of globalization, all the business are becoming future oriented and thinking of ways to
optimize their supply chain efficiencies, and this again in turn creates a chain reaction and puts a
pressure on other companies who are not thinking of adopting these new technologies.

Things like Predictive Analytics, Adaptive robotics, Augmented Intelligence, Realtime insights,
etc., enable development of new platforms and technologies, like Cognitive Internet of Things
(CIoT), which creates the potential to enable new markets and grow new revenue streams.

3
AI is becomoing essential in the process of digital transformation of supply chain, and it caters to
making an instant visibility in the supply chain of the business.

Machine learning processes practice algorithms to huge operational information feeds to find out
insights to track and predict supply chain disruptions, imparting new levels of visibilityinto daily
operations of the businesses. Those capabilities also can suggest alternative actions for
unplanned occasions and transportation disruptions.

There have been various case studies and articles in this regard that demonstrate the potential
value and innovation of applying AI to further automate devices and operating processes. In a
nutshell, the emerging leaders are building more calibrated operations in the field of supply
chain, with the goals of

 Revenue increament and entering new markets

 Increament ofoOperational efficiency and agility
 Increasing innovation in order to achieve competitive advantage

In the past decades, what has been achieved is supply chain processes from “sense and respond”
to “predict and act.” Now the supply chains have evolved into supply chain capabilities that can
feel, perceive, react and learn. AI is the next big thing which has already started and the next-
generation supply chain management will be powered by it that enables unparalleled operational
excellence.

Domains in which AI enabled solutions will assist the supply chain

 Streamlined Process
 Precision Planning
 Market Shaping
 Faster Transport

2. Historical happenings

4
Supply Chains are now being transformed into epitomes of efficiency with the help of Artificial
Intelligence and Machine Learning. However, this was not always the case. It has been estimated
that approximately 55 hours were spent by businesses in conducting manual and paper based
work, further 23 hours went into replying to supplier’s queries and around 39 hours were spent in
finding errors and rectifying them per week.

Before AI and ML came and revolutionized processes things were being done very differently.

 Today any and almost all tasks related to procurement are done with the help of chat bots
and automation, whereas earlier all the communications were conducted manually. This
took up a major portion of business’s time and efforts.
 An extremely important activity for supply chain is the planning aspect. Forecasting
demand and supply directly affects businesses. Now there are intelligent tools to make
highly accurate forecasts but earlier these forecasts had to be made manually, hence
leaving large scopes for errors.
 Inventory management and warehouse management is another crucial work in Supply
Chain. Even with an accurate demand projection a flawed supply forecasts could prove to
be highly loss making. With AIML real time forecasts are possible that take into
consideration any changes being made in demand and reflecting the same in inventory
and warehouse management. But without AIML this process becomes extremely tedious
and more prone to errors.
 Transportation and shipping are another element of supply chain that is highly important
and always involves financial stakes as well. Lead time, expenses, operations cost, labor
cost etc. all increases if shipping and logistics decisions haven’t been made adequately.
 Selecting the right supplier has high bearings on the overall profit and efficient working
of the supply chain. With AIML things have become more efficient since data sets are
utilized to assess the track record of the suppliers and choose the best possible option to
associate with. Without AIML this process again was being done manually using human
assessment and discretion.
 With work sprawled across the country and world at large keeping track of the supply
and demand for each subunit can become an extremely complex work. With every bit of
expansion and growth of business this complexity is only bound to increase. AIML has

5
 made the aspect of tracking all these elements extremely easy and on a real-time basis but
without the same it was a very tiresome process.

3. Current happenings

Organisations are generating revenue from AI investment especially in Supply Chain and
Operations domain, as per State of Artificial Intelligence for Enterprises report. Supply chain
organisations predict the degree of machine automation to grow two-fold in their supply chain
processes in the next five years, as per Gartner’s report.

The need for more powerful analytical solutions such as machine learning, deep learning, and
natural language processing has become more important due to large amount of data increasing
daily in supply chains and logistics. The growth of data isn't the only factor influencing the
advancement of AI. In reality, many of the other important factors are driving the trend,
including increased computer power and speed, algorithmic advances, and AI systems' access to
big data, all of which are having an effect on supply chains and logistics.

When faced with an epidemic like COVID-19, it has wreaked havoc on thousands of supply
chains around the world, with the economic consequences lasting for months. As the
Coronavirus spread rapidly from one country to other in Asia, Australia, Europe, America, and
the Middle East, many internal supply chains collapsed. As a result, precautionary measures
aimed at preventing the virus's spread, such as travel bans and large-scale quarantine, which have
only served to further deteriorate and disrupt global food, retail, and medical supply chains, as
well as interrupt vital business operations and lock revenues.

Just one out of ten companies, according to Körber's latest Supply Chain Complexity study, can
stay on top of their supply chain challenges. Due to increasing consumer demands, lack of
transparency, and technical efficiency, firms are now dealing with a specific set of challenges,
including logistics problems, remote jobs, shortages due to unforeseen increased demand, and
many more. As per the new study conducted by the Institute for Supply Chain Management,
approximately 75% of organisations have experienced supply chain disruptions as the results of

6
coronavirus-related transportation restrictions. This is only one of the important aspects of
COVID-19's global impact.

Instability, vulnerability, and a lack of accountability disrupt the global supply chain industry.
According to McKinsey, the pandemic has produced five major sources of supply chain
instability.

Following are five ways that AI can transform supply chain management and logistics, based on
what has happened and what we have observed over the last year.

1. Greater contextual intelligence is enabled by AI, which gives detailed data required
to minimize operational costs and inventory, as well as to respond clients more
quickly.

A report by DHL and IBM, Artificial Intelligence in Logistics, highlighted a range of

technologies capable of doing so. Among them are the following:

• Intelligent Robotic Processing – sorting of letters, boxes, and repacked shipments at high
speeds.

2. AI will help you improve supply chain management efficiency.

7
• Artificial intelligence (AI) incorporates the power of three advanced technologies – supervised
learning, unsupervised learning, and reinforcement learning – to recognise critical aspects and
problems affecting supply chain success.

• Supervised learning, for example, can spot financial fraud and make accurate predictions, while
reinforcement learning can aid real-time decision-making by providing necessary information.

3. AI can analyze massive amounts of data, which improves demand prediction

performance.

Prior to AI, earlier innovations were unable to provide value because they did not consider broad
range of variables on the demand side, such as customer attributes.

AI now makes it possible to monitor and calculate all of the variables that are needed to enhance
demand prediction performance. In reality, it creates a never-ending forecasting loop, constantly
changing the projection based on actual sales, weather, and other variables. With all of this data,
self-driving forklifts, automated processing, and self-managing stock control operated by drones
and autonomous ground vehicles could effectively transform warehouse management.

4. Artificial intelligence can help with selection of supplier and supplier relationship
management.

Supplier-side data, such as on-time, in-full delivery results, audits, reviews, and credit reporting,
can be analysed by AI and used to inform potential decisions about various suppliers. As an
outcome, a firm's supplier decisions will be more informed, and its customer service will
enhance.

5. Improved Customer Experience with AI

By personalizing relationships between logistics suppliers and users, AI transforms them. DHL
Parcel's partnership with Amazon is an excellent example of a customized user experience.
Through Amazon's Alexa-powered Echo, the courier company provided a voice-based platform
to monitor packages and get delivery status.

8
 4. Future recommendations

In a world of big data and high customer expectations, the future of the supply chain depends on
the predictive capabilities and prescription capabilities of artificial intelligence (AI) and machine
learning (ML).

The application of this type of technology is not without obstacles, risks and challenges need to
be overcome, but a company that achieves this goal correctly will achieve real-time intelligence
beyond the human scale and the future of supply chain management. Will set the standard for

 Modern cloud-centric AI platforms typically operate at a different level from the

company's existing data sources. In addition, they continue to improve the collection,
sequencing, and uniformity of information from which information is obtained without
affecting the performance of the underlying system. In addition, today's open source AI
algorithm (sometimes called "function") is specific and powerful enough to play an
important role in computing fields (such as demand forecasting).
 To minimize financial problems, prudent buyers should ensure that the cost of these
systems is directly related to the benefits they wish to provide. Finally, good demand
planning can, for example, reduce waste in the supply chain and help recover costs while
reducing operating capital, services, profits and so on. “Other direct benefits also justify
investment in digital transformation.
 As we all know, not all demand is predictable, and utility lines may be blocked.
However, we continue to receive information that provides sales opportunities, optimizes
supply lines, and / or responds to major events. We also need the ability to process and
respond to this latest information. We hope that this type of planning and continuous
execution of supply and demand will form part of the overall process and system that we
should have established. Due to so many changes, we don't want to scratch our heads at
the end of this month, trying to align spreadsheets and emails for the actual list. In other
words, we want a continuous process, not an exception and delivery.
 Continuity is both the capacity of the system and the capacity of the process. At one
stage, there are demand (forecasts, orders, new samples) and supply (production and
supply) in continuity, and people are not isolated, but working in harmony.

9
 In addition to the value system or ideal assumptions, the workload required to achieve a
fully digital, complete and accurate supply chain platform. Ultimately, this all-digital
supply chain will include multi-level functions that can detect changes between multiple
companies and service providers and coordinate responses. This would require a fairly
careful study of the business partner's business, or at least to respond to strategies and
processes quickly and reliably automatically.
 After analyzing this topic using multiple supply chain platforms, achieving full
autonomy, at least for now, does not seem to be the goal. There are more considerations
for automating information flow, data quality, better-informed information flow,
identifying key events and recommending other solutions to optimize checklists or
inventories. However, execution is most desirable. This level of automation should also
become part of the overall supply chain platform.

10
 5. Companies using AIML in Supply Chain Management

Here are some of the top businesses that are using machine learning to boost supply chain
management productivity:

(1) Microsoft Corporation – Technology

 Microsoft's supply chain structure is highly reliant on quantitative insights created by
machine learning and market intelligence.
 The business has a large product range that produces a lot of data that needs to be
centralized for statistical analysis and operating efficiency.
 Machine Learning strategies have enabled the organization to create a fully automated
supply chain infrastructure that allows them to collect and interpret data in real time.
Additionally, the company's comprehensive supply chain employs diligent and early alert
programmes that aid in risk mitigation and question resolution.

(2) Alphabet Inc.– Internet Conglomerate

 Alphabet, a well-known technical behemoth and a highly advanced technological
organization, relies on a scalable and receptive Supply Chain that can seamlessly
cooperate across regions.
 Alphabet's Supply Chain is fully streamlined thanks to machine learning, artificial
intelligence, and robotics.

(3) Amazon.com – eCommerce

 Amazon, one of the most well-known supply chain pioneers in the ecommerce industry,
makes use of artificial intelligence and machine learning-based systems such as digital
warehousing and drone distribution.
 Owing to major investments in intelligent information infrastructure, shipping, and
warehousing, Amazon's comprehensive supply chain has direct leverage of crucial areas
such as packing, order management, distribution, customer service, and reverse logistics.

11
(4) Rolls Royce – Automotive
 Rolls-Royce, in collaboration with Google, develops autonomous ships in which machine
learning and artificial intelligence technology eliminates the work of entire crew
members, rather than only one pilot in a self-driving vehicle.
 Existing corporation ships use algorithms to reliably detect what's in the water around
them and identify objects depending on the risk they pose to the ship. Algorithms based
on AIML can also be used to track ship engine performance, &control protection.

(5) UPS
UPS, one of the most well-known parcel distribution firms, utilises an AI-powered GPS system
called ORION (On-road Optimized Optimization and Navigation) to find the most reliable and
cost-effective route for its fleet. ORION uses an algorithm to determine the best path for each
distribution based on information provided by consumers, drivers, and cars. It's a real-time
machine that switches routes based on existing traffic and other variables.

(6) Marble
Marble is a logistics firm that has brought the concept to the next level. It delivers products to
people's doorsteps using robots that use the same AI system as autonomous vehicles (LIDAR). It
reduces a driver's risk, is environmentally friendly, and is a quick and cost-effective way to
complete the task.

(7) Procter & Gamble – Consumer Goods

P&G, the world's largest consumer products company, has one of the most complicated supply
chains and a vast product range. For end-to-end product flow control, the firm makes excellent
use of machine learning approaches such as deep analytics and data deployment.

(8) Lineage
Lineage manages the warehouses with the aid of artificial intelligence. The algorithm forecasts
which objects will remain in the warehouse for a longer period of time and which will be
removed quickly. As a result, the objects that will last longer are placed in the rear, and those
that will leave sooner are placed in the center. Lineage's productivity has improved by more than
20% as a result of this strategy.

12
 REFERENCES

 https://marutitech.com/machine-learning-in-supply-chain/
 https://www.ibm.com/thought-leadership/institute-business-
value/report/cognitivesupplychain#
 https://throughput.world/blog/topic/ai-in-supply-chain-and-logistics/
 https://www.mhlnews.com/global-supply-chain/article/22054569/supply-chain-losing-
hours-money-to-poor-financial-systems
 https://www.europeanbusinessreview.com/artificial-intelligence-ai-in-supply-chain-
planning-the-future-is-here-now/
 https://www.supplychainbrain.com/articles/29366-the-future-of-ai-and-supply-chain-
management
 https://supplychainbeyond.com/6-ways-ai-is-impacting-the-supply-chain/
 https://www.n-ix.com/machine-learning-supply-chain-use-cases/

13