Fear of the unknown often surfaces when new procedures and practices are introduced into the workplace, even if they are more efficient and helpful. For instance, the thought of bringing in new technology can cause some managers to tremble with fright.
But there’s no need to be alarmed, particularly when it comes to the implementation of artificial intelligence (AI). While the name might sound scary, AI is taking a leading role in today’s manufacturing by delivering superior speed, accuracy and scale throughout the supply chain process. AI allows inventory and data managers to focus on proactive, predictive and strategic initiatives rather than manually analyzing data input into disparate silos, a slow and arduous process subject to human error and the compilation of bad data.
In addition, taking advantage of AI’s machine-learning capabilities, managers can greatly reduce the amount of excess material often ordered as a hedge against materials shortfalls that could trigger a production line shutdown. The average Fortune 500 manufacturer, in fact, has anywhere from $40-$60 million in wasted working capital tied up in excess parts (and up to $100 million for just four weeks of inventory in some industries1). Now that’s something to really be afraid of.
On the other hand, Verusen’s cloud-based, advanced AI platform can fight your inventory demons by quickly harmonizing and providing visibility into materials inventory and supply chain data from existing siloed systems, while also using machine-learning capabilities to predict needed stock levels with 99 percent accuracy. Such predictability can reduce excess inventory by an estimated 10 to 30 percent within a few months, freeing up working capital and bolstering the bottom line.
The “Trick” Is Inventory Accuracy, the Treat Is Working Capital Efficiency
While calming fears over change still may present an early challenge for manufacturers, it only takes a short adjustment period for inventory and data managers to become more effective as they offload time-consuming and daunting manual tasks onto the AI platform. For example, managers who for many years have been handling controlled, algorithmic tasks, such as analyzing data from spreadsheets, can now spend more quality time on other supply chain issues rather than tackling complicated, data-driven project work.
With AI, such post-input “heavy lifting” takes place behind the scenes automatically by a neural net AI that runs across the organization. The system learns from actual supply-demand decisions with objective reasoning for replenishment strategies, thus optimizing the inventory predictability and materials procurement that are key to production uptime and more efficient supply chain operations.
AI Isn’t Coming to Eat Your Brains
While AI handles and treats data in much the same way regardless of application, it can’t just automatically jump from problem to problem without human input and direction. A good system may provide statistics-driven recommendations; however, a great system then applies what truly happens on the ground with input from procurement and operations expertise. The good news for inventory and data managers? Your jobs—and brains—are safe with AI.
It takes just a short time to introduce and take full advantage of the many benefits that AI brings to the manufacturing supply chain. But once implemented, it will materially drive inventory management and bottom-line results. It also allows organizations to better utilize smaller, often under-resourced departments so they perform with the speed, functionality and results typically achieved by much larger teams.
Verusen’s unique AI and machine learning platform was developed through hands-on experience, intensive training and productization for greater speed, accuracy and scale. Following implementation, feedback and potential adjustments, the target is for exponential growth to take off like a bat out of, well, you know—typically within a six-month period for rapid ROI.
So, you see—while it might seem a bit spooky, there’s no real need to fear the introduction of AI. When automation technology first entered into the manufacturing sector, concerned workers received new training and developed new skills to meet innovation. Today, the same goes for AI, which gives inventory and data managers the latest systems needed in today’s supply chain. The technology is designed to make companies more efficient and productive, so they can compete in the marketplace more effectively. Just as a rising tide lifts all boats, workers will also be better supported through AI’s capabilities, enabling them to work at their best levels and even focus their efforts on other areas of need. We think that’s a BOO-tiful thing.
The staff at Verusen wishes everyone a Happy Halloween!
1. Banker, Steve, “The Costs of Excess Inventory Can Be Huge,” Forbes, 10 March 2016.