Supply chain management, or SCM, is becoming a more critical job every year, as more consumers turn to e-commerce and warehouses and distribution centers grow. Technology is catching up to the exponential expansion of this industry, but it’s been a slow process. It’s a lot of work for one person, or even a team, to sort through thousands or millions of orders. Machine learning is on the cusp of becoming the next big thing in SCM. How will machine learning change how companies manage their supply chains?
IoT Inventory Management
The logistics industry as a whole has been making the slow transition to warehouse management software over the last decade or so. IoT could take the entire industry to the next level, at least concerning inventory management. In a warehouse, there’s nothing worse than not being able to find something that needs to get shipped out to a customer.
Attaching IoT sensors to products or bins makes picking painless ” instead of searching through the warehouse for a particular item, the warehouse management software uses these sensors to tell you exactly where the product is, how many of them are in the facility, and whether you need to order more to keep up with current and future demands. And it can do all these things in real time.
Automated Customer Service
Ideally, you want to have real people in your customer service department for your clients to talk to, but it’s easy to get overwhelmed by answering tons of simple questions they could have found in your FAQ. Chatbots have previously been somewhat unreliable, but when paired with machine learning, they can offer a useful tool to take some of the load off your CS reps.
AI chatbots can answer questions 24/7 with fewer errors. If you tie them to your database, they can even provide information about things like inventory and pricing. While you don’t want to trust a chatbot with private customer data like addresses or credit card numbers, they can take up the slack while giving your team the time they need to answer the questions that demand a human touch.
Machine learning has more than one application here as well. Automating things like accounts payable could save time and allow you to redirect your team’s efforts to other more vital processes. When you’re dealing with materials coming in from a variety of different suppliers, automating things like this can save you a lot of time in the long run.
Automation for Picking and Packaging
Picking and packing is the most time and cost-intensive parts of running a warehouse ” especially if you’re not a retail giant like Amazon that can afford to purchase an entire robotics startup company and start employing robots to do the work for you. Machine learning, paired with automation, could reduce wasted time and shipping errors dramatically.
One company, Swisslog, is working toward a fully automated picking system that uses machine learning to adapt to the size and shape of the item it’s picking up, preventing the robotic arms from damaging the products by using too much pressure to lift them. This automated system and others like it could alleviate labor shortages and help companies cut costs across the board.
Machine Learning and Demand Planning
One of the coolest things about machine learning is that with enough information, these systems can predict future events with a surprising amount of accuracy. Demand forecasting can help you determine when you need to order more of a particular product or component, and when you don’t need to place as big of an order. You can use past data to determine these purchase changes manually, but it’s not as efficient as being able to hit a button and let the computer do it for you.
Machine learning-powered demand planning works by letting the computer go over every selling season you’ve experienced thus far. By correlating that data, the program can predict when your company will experience high demand and when sales will start to drop off. The longer you’ve been in business, the more data it will have to work with and the more accurate the predictions will become. Using this to order your supplies can prevent you from running out during peak season, or getting stuck with excess inventory once sales slow down.
The Future of SCM
E-commerce isn’t going away, and the logistics and distribution industry needs to change if it’s got any hope of keeping up. Machine learning and the various ways it can apply to the industry will provide the tools these companies need to keep up with increasing demand. Consumers love the convenience of being able to buy everything from groceries to auto parts from the comfort of their home. Machine learning and artificial intelligence will shape the industry for years to come. Now it’s just up to company owners to make the leap and start adopting this new technology to make their lives easier.
