Respond quickly, maximize benefits, and identify supply chain opportunities and threats.
Key Takeaways:
- Supply chains need technology, but putting that technology to best use is the province of humans
- AI and ML are tools, not solutions
- It’s human judgment and ingenuity that will save the day, but the right data is vital
- Technology provides transparency and visibility across the entire supply chain, something humans cannot get on their own
- Balance between humans and technology is essential to anticipate and solve the supply chain disruptions that are all too common today, and who knows what’s coming next?
Supply chain disruptions. They grab daily headlines, and the question always on the table is how to get the visibility and agility needed to respond in time. Things can’t go on as they did pre-pandemic. No matter how good it all looked on paper, the pandemic made weak links obvious: supplier shortages and backed-up transportation networks, among other things. It also exposed worker exploitation in lower-tier vendors that shed light on serious ESG miscalculations.
Smart organizations have embraced supply chain management platforms that provide complete transparency. The best solutions that address supply chain opportunities and threats leverage artificial intelligence (AI) and machine learning (ML) to provide the data and analytics necessary to manage the modern supply chain.
But technology alone is not the answer. The real path forward combines AI with human intelligence to maximize benefits as well as identify opportunities and threats. AI can provide the essential data component; it’s useless when it comes to collaboration, negotiation, and forming relationships with suppliers. While AI mimics human thought, it’s no replacement for the human judgment that’s vital to successfully implementing your digital supply chain platform. In this article, we’ll explore how to leverage humans and technology to best advantage.
The Human Component of Digital Supply Chains
Technology is flashy and captures attention in the boardroom. A vision of a completely automated and seamlessly integrated supply chain may be presented, where machines use AI and ML to adapt, solve problems, and respond to supply and demand changes. There’s usually no mention of humans in these discussions unless it’s about how they won’t (someday) be needed any longer.
Will this sort of supply chain ever become a reality? Maybe. But algorithms won’t solve every problem, and a sophisticated demand forecasting system isn’t much use if humans ignore its outputs. The value of a digital supply chain platform depends on the ability and willingness of the people in an organization to take action in response to the data.
It’s the symbiosis between digitization and humans that creates the real chance to identify supply chain threats and opportunities. Designed to repair complex and fractured processes, algorithms can only provide information – it takes a human with logistics expertise to handle any exceptions and provide a quick response to changing circumstances.
In short, AI can increase speed and accuracy in number crunching, data handling, and supplier vetting. It can help optimize transportation routes, warehousing, and stock management and handle other specialized but mundane tasks. It can also increase customer satisfaction by improving ease of use, reducing work steps, and offering new solutions for customers to improve their own supply chain visibility.
Your supply chain platform and its associated technology is a tool. To be fully effective, the unique cognitive skills of supply chain management professionals are essential. So, how do you achieve the right balance?
How to Leverage People with Technology
There’s no doubt modern technological solutions are revolutionizing and improving supply chain performance. AI and ML are vital to gather data, crunch it, and learn from it. Automation is great, but it only takes you so far. It’s humans who use this data to make the rapid decisions today’s supply chain disruptions demand.
A recent study asked supply chain industry professionals what they thought was the right balance between humans and technology. Their opinion in 2019 was that 60% technology and 40% human expertise provided the optimum balance. That didn’t, however, discount the role of humans – it’s that their tasks are changing as technology takes on manual processes. Humans still are the best solution when strategic thinking and decision-making are needed.
In 2021, the new ideal balance was 57% technology and 43% humans. This isn’t a huge shift, but it marks an awareness that technology cannot solve all problems, no matter how advanced. Human ingenuity is a major factor in handling supply chain disruptions successfully.
The pandemic was a major factor increasing the need for technology to support humans. AI was a valuable tool in decision-making, providing usable data, helping optimize carrier networks, and identifying ways to increase operational efficiency. But it was humans who had to decide which recommendations would best serve their organization.
Technology, People, and ESG
Through the use of AI and ML that search and track patterns, organizations can keep a closer eye on and better meet their commitments to environmental, social, and corporate governance. While many companies tout their sustainability initiatives, without the data to back it up, it’s nothing more than a greenwashing exercise.
It’s about visibility and the transparency that it provides. Opaque procurement methods and multi-tier supplier networks mean it is impossible for a human to do the data analysis needed, much less make sense of it. This is where a digital supply chain platform proves invaluable.
Successfully Merging People and Technology in the Supply Chain
Here’s the bottom line: Every organization needs a robust digital supply chain platform. Every organization also needs human expertise. They both provide value, and one cannot be successful without the other.
Even without supply chain disruptions, the frailties that emerged with the pandemic need solving. The data insights provided via AI and ML are invaluable to accelerate decision-making, reduce costs, increase agility, and gain deeper insight across the supply chain. This results in improved forecast accuracy, planning confidence, and a way to continuously monitor supply chain performance.
A supply chain management platform also provides a way to visualize, evaluate, and optimize planning, sense demand, and plan out life cycles. On the supply side, you gain the ability to plan and optimize manufacturing, manage vendors, control quality, and meet compliance and ESG commitments.
With all of the data and the tools to use it effectively, humans can make faster, better decisions based on a completely transparent supply chain. At their very core, supply chains are about human connections – partnerships, collaborations, and even competition. These are all vital to a successful supply chain.
In short, technology should empower people. It’s the balance between human expertise and the information and automation provided by technology that will mark the agile, resilient, and successful supply chain.
The Technology You Need to Support Your Human Capital
Logility’s digital supply chain platform allows you to trace your supply chain end to end. That gives your supply chain experts the visibility and data they need to optimize every part of the supply chain, preserve and increase revenue, and deepen customer and supplier relationships. Our digital supply chain platform utilizes AI, machine learning, and automation to help you easily track and analyze your supply chain, so you always have optimal performance and key insights.
Make better decisions and deliver better outcomes. Contact us today.
