The Supply Chain Management Transformation: Will AI Be The Catalyst for Success?

The Supply Chain Management Transformation: Will AI Be The Catalyst for Success?

Logistics & Supply Chain

Annie Tai

Annie Tai

55 week ago — 7 min read

Recognizing the need to respond to global vulnerabilities, redesigning supply chains becomes a top management priority. (Supply chain as a business concept)

 

  • CSCO’s time has come to make real changes 

  • AI solutions in SCM taking the forefront  

  • Challenges in AI success 

 

With intensive global challenges, comes CSCO’s opportunity to make a real change to future-proof supply chains. 

 

Supply chains have been disrupted by one problem after the other. Global threats such as the pandemic, geopolitical rivalry, and economic instability exposed vulnerabilities in supply chains making its management even more complex.  

 

A Forbes survey conducted in 2022 revealed that the number one priority of global supply chain leaders over the next 12 months is reducing supply risk. With supply chain issues expected to persist moving forward, CSCOs (chief supply chain officers) are faced with the mandate to reinvent their business strategies. 

 

Alongside the functional focus areas in traditional supply chain strategy, leaders now recognize three new priorities.  

 

  • Resilience emphasizes building up systems to withstand external threats, making quick recoveries possible 

  • Agility pertains to the crucial capacity to rapidly adapt to new market conditions 

  • Sustainability involves taking steps toward long-term success by considering environmental factors and responsible usage of resources 

 

Figure 1. Next-normal supply chains are significantly more complex. 



With an increased focus on resilience, agility, and sustainability, companies are now taking a journey to digital transformation.  

 

In this era of data and advanced technology, Artificial Intelligence (AI) solutions in supply chain management are taking the forefront. 

 

A Statista report shows that AI adoption is expected to grow from widescale to crucial operations in worldwide businesses in the next two to three years.  

 

Figure 2. Artificial intelligence (AI) adoption rate in supply chain and manufacturing businesses worldwide in 2022 and 2025 

 

 

AI solutions can help organizations tackle supply chain challenges like planning, forecasting, and procurement more efficiently through an integrated end-to-end approach. With the ability to analyze and evaluate large volumes of data, AI can generate guidance for actionable decisions across an enterprise network. In addition, it even has the potential to re-engineer business workflows to transition to automation, making AI today’s game-changer. 

 

Figure 3. Business benefits of supply chains transformation with artificial intelligence (AI) worldwide in 2022   

 

 

Due to digitization, the multiple functions interlinking with supply chain are now changing their shape involving the next-normal priorities of resilience, agility, and sustainability. 

 

From traditional business models, supply chains have expanded to the possibility of centralizing data from all points. This leverages cross-functional capacity, harmonizes used-to-be fragmented data, and accelerates profitability. 

 

Figure 4. The future of supply chain: digital and AI will enable end-to-end transparency and faster decision-making. 

 

 

However, succeeding in maximizing the benefits of AI and advanced technology is an ambitious endeavor. 

 

Companies need to address additional challenges such as:

  • Predicting demand across multiple market segments

  • Determining trade-offs across countless variables and constraints

  • Implementing AI solutions across a wider scale

  • Managing the execution of tasks, and adapting to shocks 



With AI tools rapidly gaining popularity creating a crowded market landscape, it is also crucial to select the right solution that would fit ongoing specified business demands. The amount of time and investment can be significant as businesses decide to transform supply chains – and so understanding pitfalls, risks, and costs in AI adoption is equally important as acknowledging its benefits. Our next blogs will cover these topics, and more. 

 

For many companies, the supply chain management transformation is not an option, but a natural phenomenon. As the world advances and disruptions emerge, supply chains need to be built to be resilient, agile, and sustainable, if businesses are to succeed in the next-normal. Thankfully, advanced technology such as AI solutions has provided quality insights that help enterprises find the path forward. 

 

Supply chains have been disrupted by one problem after the other. Global threats such as the pandemic, geopolitical rivalry, and economic instability exposed vulnerabilities in supply chains making its management even more complex.

 

How is your business addressing the supply chain management transformation?         

*Navigate through with the right technologies. Learn more about Aratum SCM Solutions. 

 

Find your own path towards competitive advantage by leveraging technology with Aratum. Aratum’s integrated software suite helps businesses develop a smarter supply chain with automated data collection and machine learning. Book a demo today.

 

Also read: Why You Should Implement a Warehouse Scanning System

 

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