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A Perspective on

AI & Agent Technologies for SCM

Adam Cheyer
VP Engineering, Enterprise Products
acheyer@verticalnet.com

12/01/10 © 2001, Vert Tech LLC. All rights reserved. 1


Plan

• AI & Agents
• Supply and Value Chain Management
• Interesting companies: AI & Agents for SCM
• VerticalNet Activities
• Predicting the Future

12/01/10 © 2001, Vert Tech LLC. All rights reserved. 2


Thoughts on Artificial Intelligence

• What is intelligence?
– A.I. is not practical <- -> What is practical is not A.I.
• e.g. MapQuest
– Intelligent or not: Deep Blue?
– AI has moved away from general intelligence as a goal to more applied
uses
• There remain hard problems in SCM, and AI techniques will
surely be involved in the solutions
• Timeframes for introduction of A.I.
– There is such a thing as “too far ahead” of current paradigm, even if
practical today
• Technology is only a sliver of the story for business scenarios
– Computing is rarely an invisible, “magic bullet”
– Takes commitment and organizational change

12/01/10 © 2001, Vert Tech LLC. All rights reserved. 3


Artificial Intelligence Landscape

AI
Interfacing with People Knowledge Representation
and the World and Reasoning
Speech
Vision Symbolic Numeric
Reco & TTS
Natural Language Planning, Search
Input & Generation OCR Stereo Ontologies Learning
& Control
Information Retrieval Rules & Case-Based Neural
Text Extraction Logics Reasoning Networks

Multimodal Interfaces Reactive Generative


Genetic
Input & Output Planning Planning
Algorithms

Optimization
Cheyer 2001
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The Agent Landscape

Agents
Interfacing with People Knowledge Rep Software
and the World & Reasoning Engineering
User Interface Autonomous Dist. Agent Mobile
Agents Agents Communities Agents
Web Web Peer-to-
Avatars ChatBots Robotics Simulation
crawlers Services Peer
Heterogeneous
Learning Agents
Data Mgt
Collaborative
Filtering

Cheyer 2001
12/01/10 © 2001, Vert Tech LLC. All rights reserved. 5
The Supply Chain Landscape
There are two fundamental issues in supply chain. One is in relation to our
customers, in terms of being responsive and efficient in that relationship and the
other side of it is really optimizing all the costs and asset values that are embedded in
the supply chain…

ERP
SCM CRM
MRP MRP

MRP MRP

MRP
MRP
Suppliers Customers

12/01/10 © 2001, Vert Tech LLC. All rights reserved. 6


Historical Perspective
As each wave matured, the applications became stressed as businesses tried
to add additional capabilities beyond what the technologies could enable.
Inter-company relationships
become more important.
Optimization functionality of
ERP systems are not enough Value Chain
for large global enterprises Optimization
Focused on the plant
only, multi-plant
?????
enterprises required a Supply Chain Trading Partner
new solution Optimization Optimization
Efficiency

SCM b2b B2b does not


Enterprise reach the promise
Optimization • •
of automating
Expanded ERP Automated
concepts processes between
inter-company
ERP • Provided better
buyers and sellers processes.
Closed loop, hard-
optimization tools, • Initially focused on
Plant logistics, and catalog and wired integration
• Optimized multiple plants
Optimization connection to trading indirect goods
at the enterprise level
partners
MRP • Integrated Finance,
Manufacturing, HR
systems
• Optimized Plant level
inventory and cycle times

Time
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AI and Agents in SCM

Optimization Integration Interface


Planning, Scheduling, Configuration, Event Management, Knowledge representation, Data transformation, Natural Language

Rules, Learning, Data mining, Information Retrieval, Classification

Simulation, Business Intelligence

ERP
SCM CRM
MRP MRP

MRP MRP

MRP
MRP
Suppliers Customers

12/01/10 © 2001, Vert Tech LLC. All rights reserved. 8


Interesting Companies:
AI/Agents for SCM
• Optimization: ILog powers SC planning, forecasting, routing,
scheduling and optimization for companies like SAP, Oracle, I2, etc.
• Configuration: Trilogy manages configuration and translation of
products throughout the order lifecycle
• Natural Language: Dejima, iPhrase, and Nuance are creating NL
and speech interfaces to enterprise data for CRM and other apps
• Rules: BiosGroup and BlackPearl both offer enterprise products
combining modeling, rules, and multi-goal optimization
• Agent & Web Service based enterprise integration
– Enhanced Workflow: Agentis International, Action Technologies, iSpheres
– Peer-to-peer: Fiorano’s Tifosi, WebV2
– Facilitated models: Talking Blocks
– Mobile agents: Electron Economy
– Ontology-based Integration: Frictionless Commerce, Bodha, Unicorn

12/01/10 © 2001, Vert Tech LLC. All rights reserved. 9


eXtended Enterprise Management
(XEM)
Business is undergoing a fundamental transformation characterized by
modularization, specialization, business process outsourcing, that will
require new types of IT support.

Manufacturing Partner Key


Key Customer Supply Chain
Supplier
Distribution Partner
Partners operating
Contract with different:
Manufacturing Increased Customer
Core
Key Business
Data Requirements
Key • Platforms
Supplier Customer
• Systems
Inventory Visibility Modularization
Requirements
• Naming
Key Key
Supplier Customer Conventions
Industry Marketplace
Industry Marketplace
s
Many to Many
Relationships
s
s Smaller Suppliers

We are reaching the stress point of the current technology wave. In order to compete
effectively in the future, enterprises will need to optimize their value chains and extend
beyond the walls of the enterprise.
12/01/10 © 2001, Vert Tech LLC. All rights reserved. 10
Verticalnet: AI, Agents & SCM

• Verticalnet technologies:
– Interoperability: Ontology Management Infrastructure for
collaborative standards development. All applications are driven
by an ontology layer
– Distributed Data Management: real-time routing of queries across
heterogeneous information sources. Includes mapping and
translation, learning-based auto-classification, attribute extraction,
analytics
– Open Services Management: an infrastructure for constructing
multi-firm applications using a just-in-time service integration
approach. Focuses on service normalization and optimal
selection, integrated within a BPM framework.
– E-Commerce technologies: rule engines for pricing, cross-sell, etc.;
multi-party multi-attribute optimization engine for dynamic trade
• Applied initially to 59 industry-focused marketplaces, now
emphasis is on VCR (visibility, comprehension and
response) for eXtended enterprise networks

12/01/10 © 2001, Vert Tech LLC. All rights reserved. 11


Ontology Builder & Server
– Multi-user collaborative ontology generation and
maintenance tool
– Frame-based representation based on the OKBC
Knowledge Model: supports multi-inheritance,
complex types, relationships, attributes, facets
– Written entirely in Java, based on the J2EE platform:
High performance & scalability, with clustering &
failover
– A verification engine to maintain consistency of terms
stated in the language
– A role-based security model for data security and
ontology access
– Ontology difference and merging
– Internationalized

12/01/10 © 2001, Vert Tech LLC. All rights reserved. 12


C2: Distributed Visibility and
Comprehension
Management of distributed heterogeneous sources of information

Distributed (rather than warehoused)


– Source-managed publishing and maintenance
– Data resides in supplier’s own systems
– Scalability & reliability: intelligent routing of distributed queries
– Supports hybrid model: some distributed, some at hub

12/01/10 © 2001, Vert Tech LLC. All rights reserved. 13


Ontology-to-Ontology Mapping

12/01/10 © 2001, Vert Tech LLC. All rights reserved. 14


Automatic Classification Components

• Learning-based classification
– Automatically deduce statistical classification rules from classified
training set
– Integrated with manual mapping GUIs (e.g. BP): learns from new
mapping operations and accelerates mapping process by guessing
– Extremely fast autoclassification – 1000x faster than competitors
• Rule-based classification
– Graphical rule editor and rule processing engine for coding human-
readable classification knowledge
– Ontology-based inheritance allows grouping and cascading of rules
for better context management and enhanced efficiency
– Sample rule: “All products from Manufacturer1 with ID starting with
‘CP’ are capacitors”
• Abstraction layer allows combinations of multiple
classification components (e.g., first apply RBC, then catch
residual using LCB)

12/01/10 © 2001, Vert Tech LLC. All rights reserved. 15


OSM: Service and Process
Management Framework

12/01/10 © 2001, Vert Tech LLC. All rights reserved. 16


Predicting the Future

• How to predict the future?


– Many ideas start in the research labs
– Consider what analysts are saying
– Look at innovative small companies pushing/selling new ideas
– Dart board…

12/01/10 © 2001, Vert Tech LLC. All rights reserved. 17


eXtended Enterprise Management
“[XEM] will redefine the packaged apps market…[XEM] Apps Tackle Partnering
Problem – To collaborate effectively, firms will need a new breed of apps called
[eXtended Enterprise Management] to help speed up and expand the scope of
supplier, channel and customer relationships” - Forrester, May 2001
Substantially Optimization across
lowering inventory the value chain
across the entire including all tiers of
value chain suppliers and
customers

MRP
MRP MRP
MRP

XEM

Ability to perform
true collaborative
design and Transparency Full Visibility into
planning Upstream Supply and Demand
XEM: Today-2003
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XEM:Visibility and Response Across
the Value Chain

MRP MRP
MRP MRP MRP MRP
MRP MRP

MRP
MRP MRP
MRP MRP
MRP MRP
MRP
MRP

MRP
MRP
MRP MRP MRP MRP
MRP
MRP
MRP MRP MRP

MRP MRP
MRP MRP MRP MRP
MRP MRP
MRP
MRP MRP MRP
MRP MRP MRP
MRP

XEM

“Competition is increasingly becoming supply chain against supply chain.


Supply chains need to take into account the increasingly interconnected nature
of global business. Current supply chains fall short of expectations because they
deal only with isolated parts of the network: The sequential steps may be
optimized, but these are not extended across the entire network.”
- Barry Wilderman, SVP, META Group

XEM:2003-2006
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The Future Vision: eXtended Enterprise
Management Across Industries
The ultimate vision is to allow for extended enterprise management across
industries.

MRP MRP
MRP MRP MRP MRP
MRP MRP

MRP
MRP MRP
MRP MRP
MRP MRP
MRP
MRP

MRP
MRP
MRP MRP MRP MRP
MRP
MRP
MRP MRP MRP

MRP MRP
MRP MRP MRP MRP
MRP MRP
MRP MRP
MRP MRP MRP MRP
MRP MRP

XEM
M RP MRP
MRP MRP MRP MRP
M RP MRP

MRP MRP
MRP MRP MRP
MRP MRP MRP MRP MRP
MRP MRP
MRP
MRP MRP MRP

Mining
MRP
MRP
MRP
M RP
MRP MRP MRP MRP
MRP
MRP
MRP
MRP
MRP
MRP
M RP MRP MRP
MRP MRP
MRP
MRP

MRP
MRP
MRP MRP MRP M RP
MRP
M RP
MRP MRP MRP MRP MRP
MRP MRP MRP MRP
MRP MRP
MRP MRP
MRP MRP M RP MRP MRP MRP
MRP MRP MRP MRP MRP MRP
MRP MRP
MRP MRP

XEM
MRP MRP MRP M RP
MRP MRP

XEM

Metals MRP
MRP
MRP
MRP
MRP
MRP
MRP
MRP M RP
MRP
MRP
M RP

MRP
Electronics
MRP MRP
MRP
MRP

MRP
MRP
MRP MRP MRP M RP
MRP
M RP
MRP MRP MRP

MRP MRP
MRP MRP MRP MRP
MRP MRP
MRP MRP
MRP MRP MRP MRP
MRP MRP

XEM

Automotive

XEM:2006 & beyond


12/01/10 © 2001, Vert Tech LLC. All rights reserved. 20
XEM Rollout
eXtended Enterprise Management involves many challenging integration and
technology challenges. It will take several years to achieve the ultimate vision.

XEM Master
Provisioning
Value Creation

Multi-Industry BPO
Multi-
Enterprise
Event XE
Mgmt Transactio Multi XEM
n Mgt Coordination
Demand
Sourcin Synchroniz-
XEM
g Apps ation
Delegation
XEM Data
Inventory Business Registry
XEM
XEM Apps Process
Platform
Platform Collaboratio
n

Now 2002-2006 2006 & beyond


12/01/10 © 2001, Vert Tech LLC. All rights reserved. 21
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