How Machine Learning Optimizes Supply Chain?
Machine Learning in Supply Chain
Machine learning is a revolutionary technology that helps industries optimizes their day-to-day processes. It has made its mark in supply chain optimization and maintenance. It was possible to find models of ML businesses in the supply chain industry and identify variables that affect the success of networks.
Supply chain optimization or maintenance also requires the business to examine the data and find changing patterns constantly. Whether it is a semi-automated or manual process, Machine learning now does not require manual intervention in the supply chain.
ML algorithms regularly analyze the date of the supply chain to find new patterns. It helps businesses determine new opportunities to optimize their supply chain management processes. ML-algorithms process data using limit-based modeling to find the set of factors affecting the supply chain with data presence-accuracy.
Some of the crucial elements that Artificial Intelligence can identify in supply chain planning and machine learning are production planning, inventory levels, supplier quality, demand forecasting, payment collection, logistics management, etc.
According to the research reports, 79% of companies with well-optimized and high-performance supply chains achieve higher revenue growth. Machine Learning in the supply chain has several applications, such as supply chain optimization, data analysis, forecasting, planning and cost reduction.
In this blog post, in order to give you an idea, I would like to a famous logistics company as an example that deploys machine learning technology to optimize supply chain.
XPO Logistics Deploys Machine Learning To Optimize Supply Chain:
As the corona virus epidemic continues to arouse interest in e-commerce purchases, XPO Logistics (NYSE: XPO) is promoting technological solutions to meet the demands of carrier speed and agility, along with reverse logistics and inventory management.
The honorable chief information officer of the transportation and logistics giant, Mr. Mario Harrick had recently discussed the company’s technical strategy during a fireside chat with the president of Freight Waves named ‘George Abernathy’. This tech conversation took place at the American Shippers Global Trade Tech Summit.
Harrick said that “The way you implement on a rapid supply chain, on a more efficient and effective supply chain, is by using our technology”. He also said, XPO Company invested 500 million dollars on years on its proprietary technology systems, focusing on four categories.
The company uses AI and ML technologies to analyze consumer demands and estimate inventory for all its retail customers. So there’s a better way for drivers, offering end-to-end shipment visibility and sequencing optimization in other applications, he said.
XPO Connect, the digital freight market of the company has over 60,000 carriers, and the organization is using machine learning technology to become smarter in helping carriers, and shippers sell and buy capacity. The latest COVID-19 dashboard enables customers to visualize the impact of the epidemic on the supply chain.
Another field of interest is warehouse optimization. As shippers switch from moving pallets for retailers to products purchased individually for consumers, they require more efficient warehouses. Autonomous robots are one of the best solutions that make item picking safer and efficient.
He believes that consumer buying trends that changed during COVID-19 are likely to continue in the post-epidemic world. XPO inventory returns are looking at millions of units per year, and that category will increase as more shoppers buy online – and buy return items. With reverse logistics, technology expansion will become even more critical, Harrick said.
Also Read: Uses Cases of AI in Supply Chain Management
I would say Machine learning is a booming technology that laid foundation for the next-generation logistics and supply chain ecosystem. It offers insights into improving supply chain management performance through flawless delivery management, improved customer experience, enhanced inventory planning, and optimized cost. Supply chain businesses that use machine learning are now making double-digit improvements in on-time exports and demand plan productivity.
USM Business Systems is a leading technology partner serving a wide range of industries with Artificial Intelligence and Machine Learning solutions. With its array of digital technology solutions, we help supply chain companies to improve operational performance and change the way supply chain work.