The power of intelligence in solving supply chain challenges

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3D rendering of the brain of the digital circuit and related logistics icon glowing LED lights on a blue warehouse background.  The concept of using artificial intelligence for an intelligent inventory management system.
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When it comes to dealing with global supply chain challenges, having data, insights and vision to be able to respond more quickly helps companies gain a competitive advantage, according to speakers during a session on the power of intelligence on the first day of the digital procurement world in Amsterdam on Wednesday.

Using AI to transform supply chains

Eve Appensor, director of global sourcing digital transformation, said the supply chain transformation at Technicolor Connected Home, a provider of audio and video products, began before the pandemic.

Abbinsour said short-term preparedness is not enough. Technicolor Connected Home has shifted its focus to long-term planning so the company can better forecast with greater visibility into the supply chain. “We needed to go deeper and have a plan in place to mitigate the risks,” she said.

Another speaker, Rajesh Kalidandi, founder and CEO of LevaData, said that when the pandemic hit, companies were not prepared for ingredient shortages and increased demand for products. Seeing the supply chain and knowing the next problem in the flow of goods has become a challenge. “Everyone was caught in their pants,” he said.

In the past, procurement professionals have focused on their top-tier suppliers, Caledendi said. They had to start thinking wider and get the right depth of information to make decisions more quickly.

He said that humans simply can’t take huge sets of data and make decisions from them to see what affects their product portfolio – especially in companies with thousands of parts and suppliers.

Calidendi said traditional procurement techniques must change and organizations must leverage AI capabilities so that they can proactively and continuously sense opportunities. This way, they can learn how to make changes and take action.

“That’s what we’re facing today,” he said. “You’re moving from rhythm-based engagement to source-based engagement.”

Abinsour said that as remote work becomes so dominant, organizations must also have more flexibility in on-demand manufacturing processes. She said they should practice CART – continuity, agility, flexibility and transparency.

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Today’s Economic Challenges

Calidendi said there has been an intense focus on managing suppliers and minimizing disruption through long-term planning, however, the economy is slowing, causing demand to fall. In the meantime, he noted, even with struggles with talent, layoffs began.

He said LevaData has also seen companies focused on managing inflation and accepting whatever price they need to pay for supplies now have to prioritize cutting costs. This transition has become a new challenge because organizations have to balance inflation with mitigating responsibility, Calende said.

“This is where the human part and technology need to be combined to make some of those decisions and trade-offs and make some of those calls,” he said. “It’s going to be an intense trip for the next year or so.”

But Abensour said cost-for-proposition has always been an issue. She stressed the importance of knowing how to balance risk and supply. “It’s how you anticipate the risks and your mitigation plan,” she said.

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Anticipate new volatility and drive the competitive advantage

Abbinsour said Technicolor Connected Home leverages technology and smart data to make real-time forecasts in supply planning.

She said it’s important to be able to go to your manufacturers early in the design phase and tell them they’re not selecting the right parts and suppliers. Technicolor Connected Home is able to do this “because we analyzed patterns for suppliers and components.”

Calidendi said organizations should be proactive by using analysis rather than reactive and waiting for things to happen. The competitive advantage, he said, comes from the realization that you cannot predict every problem that will occur but have rapid response capabilities that will process information about the potential impact.

Then they can discuss alternative ways to mitigate risks and take action to build resilience and rapid response. “Competitive advantage is how you go from the event [to] The speed with which you are taking action,” he said.

Competitive advantage also comes from doing things proactively by carefully planning and mitigating potential risks.

“The main thing that really affects the pipeline is when you design a product, that’s the time to make an impact [it]“And this is how to build for resilience,” Caledende said. “And if you don’t do it effectively, you will have a tail wagging dog. This is an opportunity for businesses to prepare.”

Abelsur added that companies need to reduce their time marketing and use data to gain insights to act quickly and be able to innovate. She said that if the pricing of something takes six months to negotiate, then the competition is already over. But other data such as financial data, inventory, and geopolitics should also be included.

Even if you have the technology, don’t expect things to work automatically. It’s also about people and how motivated and empowered they are to use new technologies, Kalindi said. And he said it’s up to the leaders to lead that.

In response to a question from the audience, Abbinsour said flexibility in the supply chain means flexibility and having alternative plans ready for any disruption that occurs, whether it is as big as Covid or as small as a shortage of ingredients.

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