Faces of Industry 4.0, Part 1

Revolutionizing the supply chain with AI

Published: Tuesday, April 6, 2021 - 12:03

One of the technologies driving Industry 4.0 is artificial intelligence (AI), and AI is enabling massive change in manufacturing. It is also revolutionizing the smart manufacturing supply chain as well.

It seems that for every benefit technology provides, it also spawns an associated challenge. For instance:
AI benefit: AI enables manufacturers to provide customization in a much more compressed time frame than ever before. So much so that consumers are beginning to see customization—including instant delivery—as a standard service.
Associated challenge: Forecasting for supply, demand, and price is the supply chain’s bread and butter. And all stakeholders—suppliers, manufacturers, and fulfillment partners—now face an exponential challenge in providing customer satisfaction.

Jason Tham, CEO of Nulogy, believes that AI can leverage real-time operational data to unlock greater visibility and collaboration for supply chain ecosystems. Tham maintains this is the difference between old-school forecasting and what he calls “true agility.”

“Supply chain organizations must invest in true agility instead of relying simply on forecasting,” says Tham. “Although forecasting has been a staple of supply chain planning for years, today’s volatile market has shown that disruptions and demand-spikes materialize too quickly and suddenly for forecasting alone to manage. Fast-moving consumer-goods companies (FMCGs)—also known as consumer packaged goods (CPG)—specifically are wrestling with abrupt shifts in customer buying behavior, sudden pivots to new product delivery channels, and fluctuating capacities of the external supply-chain partners upon whom they rely to fulfill retailer orders. FMCGs can’t survive, let alone thrive, on forecasting.”

“A forecasting engine with [AI enabled] machine learning just keeps looking to see which combinations of algorithms and data streams have the most predictive power for the different forecasting hierarchies.”
—Forbes, 2017

Nulogy’s proprietary platform solution leverages artificial intelligence to increase visibility and advanced collaboration, two hallmarks of Industry 4.0.

“By prioritizing deeper collaboration enabled by real-time visibility, FMCG companies and their external supply-chain partners are able to adapt and respond faster to market opportunities,” explains Tham. “Organizations can also increase bandwidth by automating routine administrative tasks as well as scale their external network by quickly and easily onboarding new contract manufacturers and packagers.”

AI enhances flexibility and speed in supply-chain network data flow and communication. By digitizing their external supply chain networks, organizations can respond to market fluctuations and manage disruptions in real time.

“Today’s environment presents unprecedented challenges for FMCGs and their external supply chain networks, and modern challenges require modern solutions. Technology is critical to solving the supply chain issues of today—where we believe agility beats forecasting.”
—Jason Tham, CEO of Nulogy

“The first step to achieving supply chain agility is to examine your current systems,” says Tham. “By implementing tools enabled by modern technology, such as data automation and AI to digitally track shop floor production, companies can eliminate outdated, manual processes and improve operations with real-time data and visibility. As a result, both sides of the supply chain relationship benefit: External suppliers become stronger partners through optimized production processes and improved service levels, while FMCGs can respond more quickly and effectively to market demands. ”

About The Author

Ryan E. Day

Ryan E. Day is Quality Digest’s project manager and senior editor for solution-based reporting, which brings together those seeking business improvement solutions and solution providers. Day has spent the last decade researching and interviewing top business leaders and continuous improvement experts at companies like Sakor, Ford, Merchandize Liquidators, Olympus, 3D Systems, Hexagon, Intertek, InfinityQS, Johnson Controls, FARO, and Eckel Industries. Most of his reporting is done with the help of his 20 lb tabby cat at his side.