GenAI transforming supply chain management - The …

GenAI transforming supply chain management - The Hindu BusinessLine

Global value chains are currently experiencing significant disruptions, revealing vulnerabilities and incurring substantial costs. An advanced analytics system, particularly Generative Artificial Intelligence (GenAI), is emerging as a potential solution to mitigate these disruptions. Companies are increasingly investing in GenAI across various functions, with projections indicating that GenAI could contribute $4.4 trillion annually to the global economy, surpassing India s GDP in FY2023. GenAI has already demonstrated its potential in revolutionizing supply chain management (SCM). For instance, it has helped an automobile manufacturer optimize production schedules and enabled a global logistics company to enhance warehouse layouts and picking/packing processes. A McKinsey SCM capability assessment revealed that GenAI-powered SCM outperformed over 90% of traditional SCM practitioners. GenAI can generate new data, designs, or solutions for more flexible supply chains. A food and beverage multinational employed GenAI to create eco-friendly supply-chain scenarios, identifying opportunities to reduce waste, minimize carbon footprint, and optimize resource usage. Moreover, GenAI enhances demand-sensing and accurate forecasting by integrating diverse data sources, such as economic indicators, social media trends, and consumer behavior patterns. This capability is particularly valuable in today s volatile markets. GenAI can also simulate market scenarios, such as power shortages and competitor actions, allowing businesses to prepare for different outcomes and meet consumer needs despite market fluctuations. Beyond improving operational efficiency, GenAI can ensure compliance with growing regulatory demands for sustainable and ethical business practices. It can trace material origins, enhancing transparency and building consumer trust. Additionally, GenAI can assist design teams in innovating product designs. However, the implementation of GenAI in SCM faces challenges. The training data for GenAI models is primarily sourced from web-crawl data post-2008, raising questions about data validity and applicability. GenAI models could improve accuracy (currently 60-70%) with more specific training. As the

Source: thehindubusinessline.com
Published on 2024-09-18

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