We hear Generative AI is transforming industries, is an ‘inflection point’ to quote US President Biden.. but what is it.. and is it actually relevant for Supply Chain?
What is Generative AI? At a high level, generative AI encompasses technologies that use machine learning models, like Generative Adversarial Networks (GANs) and transformers, to generate text, images, and ideas that didn’t previously exist. This AI learns from vast amounts of data, identifying patterns, and understanding nuances to create content that is often indistinguishable from that created by humans.
Relevance to Supply Chain: In the supply chain realm, generative AI can be revolutionary. It has the potential to optimize logistics, forecast demands with higher accuracy, personalize customer experiences, and automate decision-making processes. For instance, generative AI can simulate various supply chain scenarios, helping managers make data-backed decisions to improve efficiency and reduce costs. Furthermore, it can help in designing products, predicting maintenance, and managing inventory more effectively. Companies like J&J have been forging ahead in this regard. Does that generate a competitive advantage in the future that smaller firms can’t compete with.. potentially it might.
Our own, small scale foray has been to define ABC/XYZ classifications of item throughput using Chat GPT. This task typically is the preserve of highly trained senior professionals.. but amazingly, Chat GPT brings back accurate classifications and additional insights. So it is a good example of how we can use AI to provide insights
Conclusion: Generative AI holds significant promise for enhancing the capabilities of supply chain management. By integrating AI into their operations, companies can not only foresee but actively shape their logistical futures, leading to substantial improvements in efficiency and innovation.
