The pandemic wreaked havoc on the world’s supply chains, causing disruptions that led to empty shelves, unnecessary excess inventory, and a continuing labour shortage. COVID highlighted the weaknesses in global supply chains.
But one UK/US-based company wants to change how companies approach interruptions – even before they happen – using AI predictive modelling.
“We deploy trained AI to build digital twins of a company’s existing supply chain design,” explains Bob Rogers, CEO of Oii.ai, a data science company specializing in supply chain modelling. “From there, the AI highlights the weak links in the chain, and provides actionable solutions to strengthen the links.”
“The AI can essentially create thousands of ‘what if’ scenarios to show management teams what would happen if they take certain steps,” adds Rogers. “So the decisions are very data-driven.”
Trained AI technology can tackle the tedious tasks in supply chain designs
Oii.ai’s new Optii product plans for the unforeseen in supply chains. But more importantly, it automates supply chain reconfigurations. With thousands of variable parameters, Rogers says this kind of task is simply too cumbersome for humans to undertake efficiently.
“Current supply chains are built on the assumption that the world is static, which it obviously is not,” says Rogers. “And when an interruption occurs, companies rely on humans to understand the problems, and work out solutions.”
“But this is time consuming and intensive work. But if you feed AI technology the necessary details, it can run its scenarios and that’s when a human comes in – to decide the best course of action to optimize the company’s supply chain given the disruptions.”
Artificial intelligence technology shows its value with time-sensitive supply chains
Products that have a shelf life are particularly vulnerable to supply chain disruptions.
“During the pandemic, the government in India was prioritizing vaccine supplies for certain individuals,” explains Rogers.
“It got to the point where, after the initial deployment of vaccine supplies, the trickle down effect of getting it to 20 locations, which then distributed supplies to 20 other locations meant vaccines were not making it to the patients who needed them most,” he says.
“Oii.ai went in and built a system that took the initial parameters set by the government, and optimized vaccine distribution. We had to consider the supply, the demand for each location versus the number of identified patients most at-risk, shipping times, accessibility, previous inventory and more,” says Rogers.
“In the end, technology like this can allow supplies to get to their destinations in a timely, efficient manner.”
The future of supply chain management relies on AI technology to mitigate risks and losses
A Statista survey of responding organizations shows that supply chain disruptions cost the average company about $184M in 2021. Oii.ai believes that’s an economic hardship that can be mitigated by automating supply chain configurations.
“Just to give you an example. Our experience with clients shows an average of 50 percent reduction in discards. That means less wasted product,” explains Rogers.
“Let’s say there is a rail strike, you can’t have shelf life products just sit in a warehouse until the strike is over. You need a system to identify which lots of vital products are at risk of expiration, so they can be expedited to customers,” he adds.
Plus, some companies face penalties from their customers if products aren’t delivered on time. and smaller organizations end up with slim margins.
“All the factors that affect supply chains end up affecting companies’ bottom lines. In the end, it raises prices for consumers,” says Rogers.
“The tech to forecast supply chain risks exists. We just need to leverage it, and keep economies chugging along, even in the face of supply chain disruptions,” he adds.
