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  May 18th, 2023 | Written by

Generative AI Up and Down (and Within) Supply Chains

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Improving decision-making along supply chains is strategic work. Inventory management, procurement, and forecasting are some of the main areas large software providers such as SAP, Manhattan Associates, and Blue Yonder Group among others are pouring resources into. Unsurprisingly, artificial intelligence (AI) is front and center. 

Supply chains are chock-full of data. Making sense of said data and arriving at speedy conclusions drives competition. Traditional AI was characterized by its ability to compress information (numbers primarily) into even fewer numbers. At that point, however, a human needed to step in and process the results. Generative AI is the process of algorithms (within traditional AI) creating and generating an output. This could be a photo, video, 3d renderings as well as “advice.” The word advice is still up for interpretation as programs like ChatGPT (an all-purpose chatbot) are not 100% accurate. Yet, its proponents argue, neither are human beings. 

The future of chatbots is both exciting and downright frightening. Nestlé is rumored to be considering how chatbots and generative AI can help in evaluating the company’s security. Meanwhile, Manhattan Associates out of Atlanta is pondering ChatGPT to help streamline its warehousing and transportation operations. Simple questions such as, “where is customer A’s February shipment” could theoretically be answered faster and perhaps more accurately via a generative AI bot and unfettered access to the company’s data. \

Back in late 2019 the medical systems and consumer electronics products manufacturer Koninklijke Philips needed to ramp up the production of medical equipment, specifically ventilators. To do this they needed to scale down production in other areas. The company turned to AI to model the effects as forecasting models became more and more complex during the early-pandemic era. The accuracy is comparable if not better than traditional models and this is the potential power of this next generation of AI – generative AI.

The biggest challenge ChatGPT faces is its power. While supply chain management can certainly be bolstered, the very people using ChatGPT and similar chatbots have management worried. Some fear the data that is being shared (and potentially leaked or compromised). A January 2023 survey by Fishbowl of roughly 12,000 workers revealed over 40% had used ChatGPT and other AI tools while nearly 70% indicated they do so without informing their boss. 

This new iteration of AI is here to stay, but solving supply chain bottlenecks will rely on a release of data that was previously unimaginable.