Blog Article

How To Prepare Your Supply Chain for an AI World

What is AI and why should I care?

Artificial intelligence (AI) is a technology that enables machines to simulate the behavior or thinking of humans. You may also hear the term ‘machine learning’. This is a subset of AI that allows machines to learn from historical data automatically without requiring reprogramming. The excitement around AI comes from the potential to more efficiently solve complex problems.

With supply chains becoming ever more complex, businesses around the world are looking to technology to gain a competitive edge. So it’s no wonder the excitement around artificial intelligence has reached a fever pitch. AI promises to reduce complexity, resulting in lower costs, increased revenues, and an improved customer experience.

Initial data supports that claim. A recent survey undertaken by McKinsey & Company found that 61% of companies that incorporated AI into their supply chains saw a decrease in costs and 63% saw an increase in revenues. What’s more, with the consulting firm asserting that AI has the potential to create $1.2 to $2 trillion in total value to the supply-chain management and manufacturing sectors, these initial numbers are likely just the tip of the AI-powered iceberg.


But first, let’s make sure your company has the proper foundation to support AI.

The fervor around AI may be justified, but don’t go rushing headlong into a mission to add AI to every part of your supply chain just yet — it’s important to ground this excitement in current reality. A strategic approach to AI (and its partner-in-crime, big data), where it’s incorporated into an already solidly managed supply chain, is mission-critical. You have to learn how to walk before you can learn how to fly, after all, and that means getting the basics right.

Here are four questions to ask before embarking on your AI journey:

1. Have you created a well-designed supply chain strategy?

This may seem obvious, but it’s rarely done well in practice. First, place your customers front and center: what steps must you take to provide them with a seamless experience now and in the future? What might stand in the way of that?

Assess current capabilities, identify gaps, and manage supply chain risk. But don’t limit yourself to assessing the nuts and bolts of your supply chain. A solid supply chain strategy can’t exist without a proper customer-centric information strategy. So identify what data — both real-time and historical —you need to capture and manage for supply chain optimization.

Then, create well-defined objectives for your supply chain that align with your company’s overall business strategy. Use those to create concrete objectives on both a team and employee level. You should be able to easily trace each one directly back to your company’s goals.

2. Have you established workflows that facilitate collaboration?

Supply chains are complex and involve many employees spread across several departments as well as several third-party partners. Make sure information flows easily by establishing processes that encourage collaboration and using technology that provides real-time visibility.

Direct data integrations that enable your team to collect, store, and analyze data from any source (CRM systems, ERP systems, and customer systems) and type (forecasts, orders, shipments, etc.) are also key. This ensures that anyone who needs to can access the most up-to-date data — and that everyone is using the same data.

3. Are you data savvy?

Data is king — especially in the world of big data, where you can collect millions of structured and unstructured data points, use algorithms to sift through it, and run analytics to extract actionable insights.

But your data must be accurate and complete to take advantage of everything big data and AI-enabled analytics tools offer. And you must be strategic in your analysis: always keep in mind why you’re looking at this information and map that back to your supply chain strategy.

Lastly, don’t only collect data about your customers. Track your own activity, such as your spending patterns, forecast success rate, and so on, so you can identify areas for improvement.

4. Do you have the right people in place?

Automation isn’t meant to replace human expertise; it’s meant to facilitate it by taking some of the manual tasks off employees’ plates and giving them the time and information needed to make higher-level decisions. So hiring the right people and cultivating a company culture that values professional experience and growth is critical.

Consider your company’s approach to AI vis-à-vis your employees. Are you creating an environment that enables proper human interpretation of the data to continue to take place? Or are you instead creating one that relies on AI to drive your demand planning and decision-making?

Getting a leg up on the current competition by investing in AI and analytics is undoubtedly a good thing. Just make sure your investment doesn’t go to waste because you’ve glossed over laying a good foundation. All the way down the line — from product development to demand planning to inventory management to shipping and fulfillment — it’s imperative that you follow best practices, which is often a low-tech endeavor. Only then will advanced technologies like AI help your business reach new heights.

For more information about supply chain management best practices and what steps you need to take before making that leap, schedule a free consultation with one of our Demand Planning Xperts today. Our Atlas Planning and ForecastX solutions can help you Walk-Drive-Fly into an AI-enabled future.

About John Galt Solutions

More than ever, companies must be able to sense and respond to the dynamics of a complex supply chain. John Galt's Atlas Planning is a unified end-to-end supply chain planning platform that helps you increase forecast accuracy, optimize inventory levels and maximize supply chain performance. Since its founding in 1996, John Galt Solutions has built a proven track record of providing affordable, automated demand and inventory management services for consumer-driven supply chains. We have an unmatched ability to configure tailored solutions for customers, regardless of size, industry, or business challenge, that save both time and money by compressing implementation periods and delivering intelligent information that positively impact your bottom line.

To learn more about John Galt Solutions, contact our press office at 312-701-9026 or visit