10 Ways Machine Learning Is Revolutionizing Supply Chain Management

Machine learning makes it possible to discover patterns in supply chain data by relying on algorithms that quickly pinpoint the most influential factors to a supply networks’ success, while constantly learning in the process.

Discovering new patterns in supply chain data has the potential to revolutionize any business. Machine learning algorithms are finding these new patterns in supply chain data daily, without needing manual intervention or the definition of taxonomy to guide the analysis. The algorithms iteratively query data with many using constraint-based modeling to find the core set of factors with the greatest predictive accuracy. Key factors influencing inventory levels, supplier quality, demand forecasting, procure-to-pay, order-to-cash, production planning, transportation management and more are becoming known for the first time. New knowledge and insights from machine learning are revolutionizing supply chain management as a result.

The ten ways machine learning is revolutionizing supply chain management include:

  1. Machine learning algorithms and the apps running them are capable of analyzing large, diverse data sets fast, improving demand forecasting accuracy.
  2. Reducing freight costs, improving supplier delivery performance, and minimizing supplier risk are three of the many benefits machine learning is providing in collaborative supply chain networks.
  3. Machine Learning and its core constructs are ideally suited for providing insights into improving supply chain management performance not available from previous technologies.
  4. Machine learning excels at visual pattern recognition, opening up many potential applications in physical inspection and maintenance of physical assets across an entire supply chain network.
  5. Gaining greater contextual intelligence using machine learning combined with related technologies across supply chain operations translates into lower inventory and operations costs and quicker response times to customers.
  6. Forecasting demand for new products including the causal factors that most drive new sales is an area machine learning is being applied to today with strong results.
  7. Companies are extending the life of key supply chain assets including machinery, engines, transportation and warehouse equipment by finding new patterns in usage data collected via IoT sensors.
  8. Improving supplier quality management and compliance by finding patterns in suppliers’ quality levels and creating track-and-trace data hierarchies for each supplier, unassisted.
  9. Machine learning is improving production planning and factory scheduling accuracy by taking into account multiple constraints and optimizing for each.
  10. Combining machine learning with advanced analytics, IoT sensors, and real-time monitoring is providing end-to-end visibility across many supply chains for the first time.

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Why You Don’t Need Perfect Data to Begin Implementing Sales & Operations Planning

Royal Boon Edam a global market leader in entry solutions, was looking to shift towards a combined business model of “made to stock” and “assembly to order” – where modules which could be placed into a configuration requested by the customer would be ready for production, this meant the company needed a different logistics approach to fulfilling these orders.

An interview with Boon Edam’s Aron Waas

Implementing Sales and Operations Planning (S&OP) has many benefits.

To truly leverage it to improve business performance and predictability, you need to embark on a change management process and you need the right technology to self-enable your team.

Often, teams think they also need plenty of clean and accurate data to do it right.

But starting small can pay off. We spoke with Aron Waas, Global Supply Chain Director at Royal Boon Edam International to hear about his company’s experience.

Hello Aron, can you tell me more about Boon Edam and your role as Global Supply Chain Director?

Boon Edam is a private, family-owned company that is over 140 years old. We are a manufacturer of premium entry systems, such as revolving doors and security access gates.

We have 3 factories, one in the USA, one in China and one in the Netherlands (in the city of Edam). We have over 20 sales subsidiaries and, at this stage, 3 different Distribution & Support Centers.

These centers (or D&SCs) support our sales subsidiaries with all their inquiries, service requests and the delivery of products and services.

I am part of the global management team, responsible for everything that has to do with supply chain management. The directors of our D&SCs report directly to me.

You are currently using AIMMS to enable your S&OP process. What was the driver to look for S&OP technology and how did you do things before?

We have worldwide demand for all kinds of products and services and as I mentioned before, we have 3 different factories. We were trying to optimize the workload between these factories to have our manufacturing be as efficient as possible.

We had a financial reporting tool and based on the financial forecasting of our different sales subsidiaries, we made a forecast for products and services which was translated into a monthly demand plan and a capacity plan. This process was based on a lot of assumptions.

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Close the Loop on Supply Chain Risk: 5 Strategies to Move Product, Boost Sales and Automate Efficiency

Supply chain management is a critical function for any small to mid-sized business. Yet, too often companies rely on spreadsheets to manage supply chain activities — a risky prospect that’s labor-intensive and error-prone.

A better option is to bring these activities into your financial management or ERP system. Centralizing tasks such as order filling, inventory management and delivery tracking can positively impact sales, improve cash flow and keep you tax compliant.

Here are five ways that ERP supply chain management benefits your bottom line.

Right-sized Inventory

Getting inventory right can be tricky: too low, you risk losing customers; too high and you’re left holding the bag, so to speak.

Control Quality

Dealing with defective materials or products can be a drain on your business. Not only can it hurt sales, but it can also damage your reputation.

Optimize Shipping

Web sales have made fast, affordable shipping a must-do for all businesses. Keeping track of goods coming and going can become burdensome, not to mention the hassle of dealing with lost or late shipments.

Improve Cash Flow

Invoicing practices can greatly impact your cash flow. Moving from a manual process to automation allows you to process invoices faster and shorten the order-to-cash cycle.

Be Compliant

Navigating complex and ever-changing trade and tax rules can be daunting. Being part of a supply chain compounds that risk.

 

Read more at Close the Loop on Supply Chain Risk: 5 Strategies to Move Product, Boost Sales and Automate Efficiency

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