ARTIFICAL INTELLIGENCE, MACHINE

LEARNING AND SUPPLY CHAIN

AI, ML AND SCM
ARTIFICIAL INTELLIGENCE:
• Ability exhibited by a machine to perform complex intellectual tasks
that were, until recently, devoted to humans
• Chess game (1990’s), Speech processing (2000’s), Go game,
Chabot, autonomous vehicles (2010’s)

MACHINE LEARNING:
• Scientific and technical field aimed at giving machines the ability to learn how
to perform a complex task
• Today, can complete complex although specialized tasks:
• Image interpretation, Speech recognition
• Predict consumer purchase (recommender systems)
• Forecast sales and demand (supply chain systems)
SUPPLY CHAIN MANAGEMENT
• A supply chain consists of all parties involved, directly or indirectly, in fulfilling a
customer request.

• The supply chain not only includes the manufacturers and suppliers, but also
transporters, warehouse, retailers and customers.

• Within each organisation, such as a manufacturer, the supply chain includes all
functions involved in receiving and filling a customer request.

• These functions include, but are not limited to, new product development,
marketing, operations, distribution, finance and customer services.
AI, ML AND SUPPLY CHAIN
• Demand Forecasting and Inventory Planning
• Materials Sourcing
• Manufacturing Decisions
• Quality Assurance
• Delivery and Logistics
BIG DATA 7 V’S:
• Volume
• Velocity
• Variety
• Variability
• Veracity
• Visualization
• Value
DEMAND FORECASTING : LEARNING THE MODEL

Past sales data

Machine Learning:
what is the
Past context simplest model f(.)
data that explains well
Past
the demand? f(.) demand
Past marketing
operations Past demand=
f(sales, Context,
Past exogenous MO, Exo)
data
DEMAND FORECASTING: EXPLOITING THE MODEL

Future context
data

Future marketing Demand

operations f(.) forecast

Future exogenous
data
NEW PRODUCT FORECASTING :
LEARNING

Clustering Learning
NEW PRODUCT FORECASTING : EXPLOITING THE MODEL

Sales forecast
New product features
• Colour = XXX
• XXXXX = XXX
• XXXXX = XXX
• XXXXX = XXX
ARTIFICIAL INTELLIGENCE IN
PROCUREMENT
• AI is helping drive cost reduction and compliance agenda through
procurement by generating real time visibility of the spend data

• The spend data is automatically classified by AI software and is checked

for compliance and any exceptions in real time
ARTIFICIAL INTELLIGENCE
WAREHOUSING
• Use of autonomous fork lifts is “reaching a level of maturity” in warehouse
operations
• Warehouse planning
 DELIVERY AND LOGISTICS : SELF-DRIVING
VEHICLES
• Self-driving delivery trucks on public roads
AI : ELIMINATING CORRUPTION

• The AI algorithm analyses HR and finance data, procurement

requests, tender approvals, workflows, non-financial data like
government employee’s family details and vendor employee to identify
potentially corrupt or negligent practices
QUESTIONS…?