Can generative A.I. technology fix the supply chain?
Companies are looking at the latest AI technology as a way to make sense of vast stores of data, improve logistics decisions
Logistics experts say chatbots could be used to tell companies in simple language how to plan their inventories.
Logistics experts are trying to find out whether the latest development in artificial intelligence, a chatbot that has triggered a global race to refine the technology for work tasks, can tell them how to fix their supply chains.
Big software providers including Blue Yonder Group Inc., SAP SE and Manhattan Associates Inc. have research programs under way looking at how the tech known as generative AI can improve forecasting, procurement, inventory management and even the nuts and bolts of shipping decisions.
“Suddenly you have this super smart supply-chain analyst that can do reasoning,” said Duncan Angove, chief executive of Scottsdale, Ariz.-based Blue Yonder, which is piloting a tool for its retailer, manufacturer and logistics provider customers to use when considering fulfillment options.
The tool eventually will be able to answer questions such as “which is the most profitable option? Which one would make my top three customers the happiest?” Mr. Angove said.
Addressing the practical questions behind logistics operations would mark a step beyond the demonstrations of the AI, from songwriting to news stories with a deceptively human sound, that have gained widespread attention through OpenAI’s popular ChatGPT program. Logistics technology experts say they are focused on the tool’s ability to digest vast amounts of data and deliver clear, useful conclusions, which could solve a major problem for businesses that are overloaded with information.
“The traditional AI was compressing information, a lot of numbers into fewer numbers. But then there’s still a brain that has to process it,” said David Vallejo, global head of supply chain planning, manufacturing and logistics at German’s SAP, one of the world’s largest providers of Enterprise Resource Planning Software. “Now, this has taken it a step further.”
Mr. Vallejo said chatbots could be used to tell companies in simple language how to plan their inventories, for example.
Chatbots Are Stepping Toward Supply Chains
There are big challenges with relying on programs like ChatGPT for critical tasks in supply-chain planning, experts said. The technology sometimes gives inaccurate responses based on the pool of information it has been trained on.
Marko Pukkila, an analyst at research firm Gartner Inc., said some companies are planning for a future where they can ask a chatbot how to fulfill a big order and get a response laying out the cheapest and fastest options.
“But that kind of stuff is the stuff that’s still years and years and years away,” Mr. Pukkila said.
Food-and-beverage giant Nestlé SA, the maker of Nespresso coffee and DiGiorno frozen pizza, said it is considering how to use generative AI in its operations but is evaluating its security.
Atlanta-based Manhattan Associates, which provides software that helps companies manage their transportation and warehousing operations, is experimenting with ChatGPT and similar technology for its customers, said Chief Technology Officer Sanjeev Siotia. The tools some day may allow supply-chain managers to “simply ask, ‘Where is what?’” and get a clear answer, Mr. Siotia said.
One supporter of generative AI’s potential use in supply chains is ChatGPT itself, although the tool suggests the technology still needs development.
“ChatGPT may be the missing link in supply chain communication,” the tool wrote when asked about its possibilities. “But like any innovative solution, it comes with its own set of challenges.”
