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Day: 17 November 2023

Where AI Can Find its Place in SCM

Posted on by David Priestman

Jag Lamba (pictured), CEO of Certa, writes about how AI can be beneficial to supply chain professionals and SCM (supply chain management).

While most of the coverage of the rise of artificial intelligence in the past year or so has been on generative models such as ChatGPT that can be used by the average person, the business world is no stranger to AI. It’s been used for years to streamline workflows, analyse data, and build predictive models that can steer organizations in the right direction.

But there’s no doubt that we’re in a moment where AI is growing in its applications and power faster than ever before — so we need to ask, can we use its latest iterations to make our jobs easier as supply chain managers? Given the supply chains that still bear scars from the rough going that started in 2020, anything that can reduce risk and improve managers’ ability to make smart strategic decisions is welcome. Let’s discuss a few ways that AI is showing up in the logistics toolbox.

AI lets you adapt to global market movements

In today’s unstable and rapidly changing economic and geopolitical landscape, supply chain managers are often saddled with the unenviable task of pivoting quickly as a result of some major event like a war or political turmoil. With how interconnected the world is, these disruptive events seem to be happening on a regular basis.

Fortunately, advances in AI make it possible for operations to sync with current market dynamics — with high levels of automation and minimal input from users. Something as simple as a business requirement document (BRD) inputted into an AI engine can spur the system to adapt workflows accordingly. Normally, these complex workflows would take a significant amount of time — especially when they change so rapidly — but AI has advanced in its language processing to the point where it can interpret documents like a BRD and use old workflows as a template to create new processes better suited to the moment.

AI can gather, parse, and visualize insightful data with simple queries

Thanks to the advancements in conversational AI, insights into the various data points gathered along the supply chain are a quick query away. Data visualizations can be generated with ease, and conversational AI lets you drill down into that data just by asking for certain filters or parameters to be applied. These systems also often provide a way to generate simple reports for sharing with stakeholders.

AI’s ability to predict market shifts by analysing historical data and patterns in the market alongside the context of what’s happening in the world right now can be a major competitive advantage. Supply chain managers equipped with access to these data insights can steer their organization’s efforts today into the right position for success tomorrow and beyond.

AI speeds up supplier compliance processes

When AI is plugged into historical data for partners and vendors, it can speed up the compliance process (and improve the odds of meeting regulatory standards) by making the information-gathering stage quick and easy. It can pull data from onboarding, email and chat conversations, and other sources to pre-fill in large portions of the forms required to meet various regulatory requirements. AI is responsive and dynamic by nature, so suppliers can work with the AI to fill in any missing information and verify what’s there. The onus for validation of such information falls to the supplier, so when AI is able to make that process quicker and easier for them, you’ll often see quicker turnarounds and fewer compliance oversights.

AI is a boon for sustainability initiatives

Sustainability is far more than a buzzword — in supply chain management circles, it’s a core tenet of operations. It’s responsible environmental stewardship, sure, but also a way to drive down costs and risks. AI can make it quick and easy for managers to get a birds’ eye view not only of their own company’s carbon footprint and sustainability initiatives, but also those of potential suppliers. This allows companies to make smarter decisions when it comes to choosing suppliers that will match their sustainability plans and not open them up to ESG-related risks.

AI isn’t done evolving — not even close. Though it’s been a useful tool for businesses for decades now, conversational AI and a focus on new implementations of the technology means we’re in an exciting time of innovation. Supply chain managers ignore AI at their own peril — smart and judicious use of the technology can help smooth out operations and give companies a competitive edge in the years to come.

Where AI Can Find its Place in SCM

Posted on by Keith McKinley

Jag Lamba (pictured), CEO of Certa, writes about how AI can be beneficial to supply chain professionals and SCM (supply chain management).

While most of the coverage of the rise of artificial intelligence in the past year or so has been on generative models such as ChatGPT that can be used by the average person, the business world is no stranger to AI. It’s been used for years to streamline workflows, analyse data, and build predictive models that can steer organizations in the right direction.

But there’s no doubt that we’re in a moment where AI is growing in its applications and power faster than ever before — so we need to ask, can we use its latest iterations to make our jobs easier as supply chain managers? Given the supply chains that still bear scars from the rough going that started in 2020, anything that can reduce risk and improve managers’ ability to make smart strategic decisions is welcome. Let’s discuss a few ways that AI is showing up in the logistics toolbox.

AI lets you adapt to global market movements

In today’s unstable and rapidly changing economic and geopolitical landscape, supply chain managers are often saddled with the unenviable task of pivoting quickly as a result of some major event like a war or political turmoil. With how interconnected the world is, these disruptive events seem to be happening on a regular basis.

Fortunately, advances in AI make it possible for operations to sync with current market dynamics — with high levels of automation and minimal input from users. Something as simple as a business requirement document (BRD) inputted into an AI engine can spur the system to adapt workflows accordingly. Normally, these complex workflows would take a significant amount of time — especially when they change so rapidly — but AI has advanced in its language processing to the point where it can interpret documents like a BRD and use old workflows as a template to create new processes better suited to the moment.

AI can gather, parse, and visualize insightful data with simple queries

Thanks to the advancements in conversational AI, insights into the various data points gathered along the supply chain are a quick query away. Data visualizations can be generated with ease, and conversational AI lets you drill down into that data just by asking for certain filters or parameters to be applied. These systems also often provide a way to generate simple reports for sharing with stakeholders.

AI’s ability to predict market shifts by analysing historical data and patterns in the market alongside the context of what’s happening in the world right now can be a major competitive advantage. Supply chain managers equipped with access to these data insights can steer their organization’s efforts today into the right position for success tomorrow and beyond.

AI speeds up supplier compliance processes

When AI is plugged into historical data for partners and vendors, it can speed up the compliance process (and improve the odds of meeting regulatory standards) by making the information-gathering stage quick and easy. It can pull data from onboarding, email and chat conversations, and other sources to pre-fill in large portions of the forms required to meet various regulatory requirements. AI is responsive and dynamic by nature, so suppliers can work with the AI to fill in any missing information and verify what’s there. The onus for validation of such information falls to the supplier, so when AI is able to make that process quicker and easier for them, you’ll often see quicker turnarounds and fewer compliance oversights.

AI is a boon for sustainability initiatives

Sustainability is far more than a buzzword — in supply chain management circles, it’s a core tenet of operations. It’s responsible environmental stewardship, sure, but also a way to drive down costs and risks. AI can make it quick and easy for managers to get a birds’ eye view not only of their own company’s carbon footprint and sustainability initiatives, but also those of potential suppliers. This allows companies to make smarter decisions when it comes to choosing suppliers that will match their sustainability plans and not open them up to ESG-related risks.

AI isn’t done evolving — not even close. Though it’s been a useful tool for businesses for decades now, conversational AI and a focus on new implementations of the technology means we’re in an exciting time of innovation. Supply chain managers ignore AI at their own peril — smart and judicious use of the technology can help smooth out operations and give companies a competitive edge in the years to come.

Rewiring Supply Chains for Digital Age

Posted on by David Priestman

At the height of the COVID-19 pandemic, organisations were forced to take bold steps to reconfigure their supply chains for the future, writes Nigel Pekenc (pictured), Specialist Partner, Operations and Performance Practice, and Anny Marcus, Associate at Kearney. With worldwide material shortages and logistics disruptions hindering operations across the globe, these shockwaves forced companies to rewire supply chains at short notice. The effect of this test is still being felt.

A return to the pre-pandemic status quo seems unlikely. The crisis revealed weaknesses in supply chains and can be better understood as a catalyst that forced organisations to make their networks more flexible and agile.

Yet, more than three years after the pandemic began, there is still an urgent need to address some of the challenges it raised and to reflect on long-term issues facing supply chains, such as geopolitical uncertainty and the effects of climate change. Meeting these challenges will require a ‘digital first’ approach and put pressure on organisations to start thinking about their supply chains through a ‘regenerative’ lens. This means looking at how their operations can contribute more to the world than they take, such as by embracing the principles of a circular economy.

The COVID-19 hangover

Today, many businesses are still struggling to predict demand after losing a steady baseline which traditionally helped them understand where and how supply chains were performing. Events in recent years, from the pandemic to geopolitical shocks, the economic slowdown in China and more, have highlighted pre-existing vulnerabilities and made forecasting progressively harder to set. As upstream material processors and downstream product assemblers struggle to set capacity and stock without a reliable history to base predictions on, the effects of sudden demand surges are amplified across the supply chain.

This ‘bullwhip pattern’ may have been measured in weeks before the pandemic, but economic constraints have moved these timescales back by months or even years. The result is that many companies are producing either too much or too little, with very few achieving the ‘Goldilocks’ optimum of the exact stock they need.

Long-standing geopolitical issues

Together with climate change and digitalisation, geopolitical changes are a driving force behind the rewiring of global value chains. Over the last few decades, countries such as China and India have had a cost advantage when it comes to manufacturing, resulting in a wave of deflation within the global economy. However, the normalisation of income levels worldwide is now prompting businesses to rethink where they base manufacturing and subsequent network reconfigurations.

Another contentious geopolitical element is the US’ gradual retreat from its role as the guarantor of international trade. As we move beyond the post-Bretton Woods norms of international trade, companies will need to adjust to the fact that supply chains are no longer based on free global trade assumptions and potentially adapt to a new, emerging world order. Tackling climate change and digitalisation

Climate change and digital transformation are two key priorities which are also driving the restructuring of global value chains.

The effects of climate change are already manifesting in wildfires, droughts, and other natural disasters. The volatility these natural disasters create produces shocks across supply chains, forcing organisations to manage the impact of climate variability on production and distribution processes. The renewed focus on reducing Scope 3 emissions will also drive many supply chain decisions in the medium and long term. This focus on sustainability stems from corporate targets, many of which have been set for 2030, as well as consumer demand for greater sustainability across the value chain.

In a similar vein, digitalisation has altered the building blocks of supply chains. With operations now integrated into a single platform and decisions optimised by computers, rather than people with spreadsheets – the dynamics of how supply chains operate are fundamentally different. It is still early doors, but large incumbents are contending with the challenge of quickly adapting legacy systems to a digital-first environment. On top of that, they’re now competing with new players who have already built supply chains from the bottom up, leapfrogging traditional industry leaders.

Working smarter, not harder

In light of these challenges, companies must find smarter ways to manage these risks. Considering a regenerative approach, alongside adopting digital solutions, will be critical to managing an intricate supply network. Organisations are now past the point of being resilient and need to consider themselves as inextricably interconnected with the societies and natural world in which they operate, and the value that they can add to this ‘ecosystem’.

For example, by optimising and even shortening supply chains, businesses will not only benefit from a faster process but will simultaneously minimise their carbon footprint. Such initiatives that enhance business efficiency while also reducing environmental and social impacts are the perfect example of a regenerative business model. According to our research, 45% of businesses are already operating a regenerative supply chain, and it is time that the rest followed suit.

Partnering with suppliers that hire from disadvantaged demographics in their local communities will also not simply provide a business with a necessary product, but will enable that company to ‘give back’ to areas that it invests in.

Digital solutions can also help businesses become more agile while seeking innovative and strategic approaches to navigate the complexities of the global marketplace. For example, technological advances can enable organisations to adopt a multi-shoring or bimodal supply chain. These strategies involve a main and redundant supply network. The main network would be a high-volume one located in higher-risk regions with lower labour costs, while the redundant network would be more complex, designed for lower volumes that still preserve key complexities and intellectual property. All these changes will be underpinned by data and leveraging it smartly will help companies stay ahead of the curve.

Dealing with a changing geopolitical environment, climate change, and digital transformation is both difficult and expensive to achieve, but the recipe for success will rely on using technology to do the bulk of the heavy lifting and adopting a regenerative approach to bolster the security and strength of a supply chain.

Rewiring Supply Chains for Digital Age

Posted on by Keith McKinley

At the height of the COVID-19 pandemic, organisations were forced to take bold steps to reconfigure their supply chains for the future, writes Nigel Pekenc (pictured), Specialist Partner, Operations and Performance Practice, and Anny Marcus, Associate at Kearney. With worldwide material shortages and logistics disruptions hindering operations across the globe, these shockwaves forced companies to rewire supply chains at short notice. The effect of this test is still being felt.

A return to the pre-pandemic status quo seems unlikely. The crisis revealed weaknesses in supply chains and can be better understood as a catalyst that forced organisations to make their networks more flexible and agile.

Yet, more than three years after the pandemic began, there is still an urgent need to address some of the challenges it raised and to reflect on long-term issues facing supply chains, such as geopolitical uncertainty and the effects of climate change. Meeting these challenges will require a ‘digital first’ approach and put pressure on organisations to start thinking about their supply chains through a ‘regenerative’ lens. This means looking at how their operations can contribute more to the world than they take, such as by embracing the principles of a circular economy.

The COVID-19 hangover

Today, many businesses are still struggling to predict demand after losing a steady baseline which traditionally helped them understand where and how supply chains were performing. Events in recent years, from the pandemic to geopolitical shocks, the economic slowdown in China and more, have highlighted pre-existing vulnerabilities and made forecasting progressively harder to set. As upstream material processors and downstream product assemblers struggle to set capacity and stock without a reliable history to base predictions on, the effects of sudden demand surges are amplified across the supply chain.

This ‘bullwhip pattern’ may have been measured in weeks before the pandemic, but economic constraints have moved these timescales back by months or even years. The result is that many companies are producing either too much or too little, with very few achieving the ‘Goldilocks’ optimum of the exact stock they need.

Long-standing geopolitical issues

Together with climate change and digitalisation, geopolitical changes are a driving force behind the rewiring of global value chains. Over the last few decades, countries such as China and India have had a cost advantage when it comes to manufacturing, resulting in a wave of deflation within the global economy. However, the normalisation of income levels worldwide is now prompting businesses to rethink where they base manufacturing and subsequent network reconfigurations.

Another contentious geopolitical element is the US’ gradual retreat from its role as the guarantor of international trade. As we move beyond the post-Bretton Woods norms of international trade, companies will need to adjust to the fact that supply chains are no longer based on free global trade assumptions and potentially adapt to a new, emerging world order. Tackling climate change and digitalisation

Climate change and digital transformation are two key priorities which are also driving the restructuring of global value chains.

The effects of climate change are already manifesting in wildfires, droughts, and other natural disasters. The volatility these natural disasters create produces shocks across supply chains, forcing organisations to manage the impact of climate variability on production and distribution processes. The renewed focus on reducing Scope 3 emissions will also drive many supply chain decisions in the medium and long term. This focus on sustainability stems from corporate targets, many of which have been set for 2030, as well as consumer demand for greater sustainability across the value chain.

In a similar vein, digitalisation has altered the building blocks of supply chains. With operations now integrated into a single platform and decisions optimised by computers, rather than people with spreadsheets – the dynamics of how supply chains operate are fundamentally different. It is still early doors, but large incumbents are contending with the challenge of quickly adapting legacy systems to a digital-first environment. On top of that, they’re now competing with new players who have already built supply chains from the bottom up, leapfrogging traditional industry leaders.

Working smarter, not harder

In light of these challenges, companies must find smarter ways to manage these risks. Considering a regenerative approach, alongside adopting digital solutions, will be critical to managing an intricate supply network. Organisations are now past the point of being resilient and need to consider themselves as inextricably interconnected with the societies and natural world in which they operate, and the value that they can add to this ‘ecosystem’.

For example, by optimising and even shortening supply chains, businesses will not only benefit from a faster process but will simultaneously minimise their carbon footprint. Such initiatives that enhance business efficiency while also reducing environmental and social impacts are the perfect example of a regenerative business model. According to our research, 45% of businesses are already operating a regenerative supply chain, and it is time that the rest followed suit.

Partnering with suppliers that hire from disadvantaged demographics in their local communities will also not simply provide a business with a necessary product, but will enable that company to ‘give back’ to areas that it invests in.

Digital solutions can also help businesses become more agile while seeking innovative and strategic approaches to navigate the complexities of the global marketplace. For example, technological advances can enable organisations to adopt a multi-shoring or bimodal supply chain. These strategies involve a main and redundant supply network. The main network would be a high-volume one located in higher-risk regions with lower labour costs, while the redundant network would be more complex, designed for lower volumes that still preserve key complexities and intellectual property. All these changes will be underpinned by data and leveraging it smartly will help companies stay ahead of the curve.

Dealing with a changing geopolitical environment, climate change, and digital transformation is both difficult and expensive to achieve, but the recipe for success will rely on using technology to do the bulk of the heavy lifting and adopting a regenerative approach to bolster the security and strength of a supply chain.

Unlocking Millions via Small to Mid-box Developers

Posted on by David Priestman

Jason Rockett (pictured), managing director of industrial and logistics property company, Potter Space, shares his view on the small to mid-box (sub-100k sq. ft.) property market in light of the company’s new research report, ‘BIG Things in SMALL Boxes’, conducted in collaboration with Savills.

An increasing lack of land is blocking growth for businesses in the small to mid-box (sub 100k sq. ft.) warehousing sector, our latest report has revealed. The stagnation in development has been shown to be holding back job creation and is costing the economy £480 million in Gross Value Added (GVA) per year.

The second edition of our annual industry benchmarking report, BIG things in SMALL boxes, commissioned in collaboration with Savills, aims to lift the lid on the challenges faced by the small to mid-box segment of the market and highlight potential solutions.

It has revealed that the biggest challenge facing the small to mid-box logistics property sector is that of ‘suppressed demand’. This is where demand for space far outstrips the supply of units and land available, with the average figure of suppressed demand currently at 38 per cent across England. It is this lack of supply that is stifling growth in the I&L sector with a significant loss of opportunity for the UK economy.

Among the worst affected areas are Nottingham and Derbyshire (51 per cent), Birmingham (57 per cent) and Leicestershire (101 per cent). While the Midlands is undoubtably an area of focus for the industry, being home to the logistics ‘Golden Triangle’, there are also improvements to be made in areas such as Stoke and Stafford, where suppressed demand currently sits at 50 per cent, and Crawley in the South East, where demand has been suppressed by 166 per cent.

The growing need for space within the small to mid-box sector is undeniable, but there are numerous barriers to the rapid increase of development of smaller premises, often due to decisions made by local planning authorities to provide land to big-box schemes and residential developments. Change is needed now to unlock the supressed demand across the sector and ensure that it continues to grow – generating jobs and wealth for local communities.

To combat these issues, there needs to be a coordinated approach from Government and local authorities to identify opportunities for small to mid-box development alongside other sectors. This will lead to an opportunity for collaboration between a mix of developers.

Co-location of small box schemes alongside big box is a large part of the solution. The responsibility for making this happen lies with local authorities who must think outside the box and seek to understand the benefits that mixed schemes can offer to local economies, workforces, businesses and consumers. Local authorities should take a positive approach to planning to unlock economic benefits and local planners should consider land that is unsuited to bigger warehouses as opportunities for smaller facilities, including areas close to residential developments, beside motorway junctions or railway tracks. Collaboration is key to ensuring that millions of pounds in GVA is unlocked.

Unlocking Millions via Small to Mid-box Developers

Posted on by David Priestman

Jason Rockett (pictured), managing director of industrial and logistics property company, Potter Space, shares his view on the small to mid-box (sub-100k sq. ft.) property market in light of the company’s new research report, ‘BIG Things in SMALL Boxes’, conducted in collaboration with Savills.

An increasing lack of land is blocking growth for businesses in the small to mid-box (sub 100k sq. ft.) warehousing sector, our latest report has revealed. The stagnation in development has been shown to be holding back job creation and is costing the economy £480 million in Gross Value Added (GVA) per year.

The second edition of our annual industry benchmarking report, BIG things in SMALL boxes, commissioned in collaboration with Savills, aims to lift the lid on the challenges faced by the small to mid-box segment of the market and highlight potential solutions.

It has revealed that the biggest challenge facing the small to mid-box logistics property sector is that of ‘suppressed demand’. This is where demand for space far outstrips the supply of units and land available, with the average figure of suppressed demand currently at 38 per cent across England. It is this lack of supply that is stifling growth in the I&L sector with a significant loss of opportunity for the UK economy.

Among the worst affected areas are Nottingham and Derbyshire (51 per cent), Birmingham (57 per cent) and Leicestershire (101 per cent). While the Midlands is undoubtably an area of focus for the industry, being home to the logistics ‘Golden Triangle’, there are also improvements to be made in areas such as Stoke and Stafford, where suppressed demand currently sits at 50 per cent, and Crawley in the South East, where demand has been suppressed by 166 per cent.

The growing need for space within the small to mid-box sector is undeniable, but there are numerous barriers to the rapid increase of development of smaller premises, often due to decisions made by local planning authorities to provide land to big-box schemes and residential developments. Change is needed now to unlock the supressed demand across the sector and ensure that it continues to grow – generating jobs and wealth for local communities.

To combat these issues, there needs to be a coordinated approach from Government and local authorities to identify opportunities for small to mid-box development alongside other sectors. This will lead to an opportunity for collaboration between a mix of developers.

Co-location of small box schemes alongside big box is a large part of the solution. The responsibility for making this happen lies with local authorities who must think outside the box and seek to understand the benefits that mixed schemes can offer to local economies, workforces, businesses and consumers. Local authorities should take a positive approach to planning to unlock economic benefits and local planners should consider land that is unsuited to bigger warehouses as opportunities for smaller facilities, including areas close to residential developments, beside motorway junctions or railway tracks. Collaboration is key to ensuring that millions of pounds in GVA is unlocked.

Multi-agent Orchestration Software is Game Changer

Posted on by David Priestman

Synergy Logistics, an innovator in warehouse technology, is reporting remarkable results with its ground-breaking multi-agent orchestration platform (MAO), SnapControl. This software solution empowers warehouses to achieve seamless and efficient control over all automation devices and robots within their distribution centres (DCs).

SnapControl stands out as a game changer because it enables comprehensive data capture, allowing businesses to assess the operational value generated by each device in real time. This data-driven approach empowers decision-making, ensuring optimum performance and efficiency. The software’s first deployment, in collaboration with a rapidly expanding U.S. online retailer, demonstrated the transformative capabilities of SnapControl.

By analysing data from this breakthrough installation, SnapControl was able to optimise the allocation of tasks between human and automated resources. It determined the quality of manual versus automated pick tasks and identified the manual picks required in areas serviced by Autonomous Mobile Robots (AMRs). As a result, the operation achieved a sixfold increase in productivity.

This translated into a return on investment (ROI) in automated resources, amounting to labour savings of over half a million dollars. On average, the company now saves over $40,000 per week, with an impressive investment payback period of just 23 weeks. Out of over 40,000 stock picks, more than 24,000 were automated tasks — equivalent to 61% of the workload — seamlessly controlled by SnapControl. This automation has significantly alleviated the workload of the existing warehouse staff.

Smitha Raphael, Chief Product & Delivery Officer for Synergy Logistics, explained the software’s swift deployment: “We deployed both the SnapFulfil and SnapControl solutions in under 60 days to manage allocation of work to AMRs and routing of work to carton right-sizing equipment without major software upheavals.”

She added: “The real added value is the complete data picture it brings, which can facilitate tangible labour savings, accurate asset management decisions, and rapid time to value. With this customer, for example, if a robot battery is dead, SnapControl tells them instantly and automatically reassigns the task to a worker with an RF scanner, so there is no downtime.”

In addition to achieving full operational status for their new 300,000 sq. ft. warehouse within one week of going live, the company’s receiving, inventory, and shipping processes were also fully operational immediately. This allowed the operation to swiftly pivot and focus on new initiatives, maintaining agility in response to evolving market demands.

SnapControl seamlessly integrates with the warehouse management system (WMS) SnapFulfil and is compatible with any other incumbent WMS, Order Management System (OMS), or e-commerce front-end system, whether in the cloud or locally. This versatility allows SnapControl to orchestrate the prioritisation of work, automatically allocate tasks and workflows, and evaluate which devices are best suited for specific operations.

SnapControl’s comprehensive capabilities position it as a pivotal tool in the realm of distribution centre automation. By interpreting bi-directional communication between machines and advanced WMS, SnapControl facilitates efficient, automated decision-making—a critical component of the second wave of automation recognized by leading industry analysts. This approach deviates from the mass adoption of robots and focuses on targeted automation, enabling productivity improvements as robot fleets expand from multiple vendors and diversified portfolios.

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