In the world of supply chain management, the winds of technological change are blowing stronger than ever. It is becoming more evident that purpose-built intelligent applications are increasingly shaping the future of supply chain technology, especially in the functional area of MRO and indirect materials management. This represents a comprehensive departure from the interconnected and project-oriented approach of the past.
With multiple lessons learned over the past three years, purpose-built intelligent applications create the connective tissue that solves specific problems by weaving together disparate systems of records and transactions such as ERP, EAM, and P2P. Most importantly, by removing the need for completely clean MRO data, intelligent “routines” can help organizations drive optimization and increase collaboration across internal teams and external supplier networks.
The business data consolidation trend repeats a bit of important history in the larger ERP industry, where in the late 1990s a wave of well-funded “middleware” companies, including Active Software, BEA Systems, and WebLogic, shaped the e-business trend, Transforming enterprise application and service-oriented architecture (SOA) has been a huge success, using software as a central medium to link data from many applications and data types together into one cohesive system.
For today's supply chain, new software engines powered by GenAI, deep learning, and natural language processing (NLP) can process significantly larger data sets than previous forms of machine learning. They can analyze complex variables, including MRO inventory and spending data, much faster. These intelligent applications can help build data links between different enterprise resource planning (ERP) software platforms for companies to manage their daily operations and associated purchasing needs.
By removing the requirement for “clean” data, these intelligent “routines” will allow enterprise manufacturers to use their existing MRO data, creating value faster than ever before. This will help drive demand and optimization signals across entities with supplier networks.
Goal-based intelligence
The days of siled supply chain systems are numbered as the industry enters the era of purpose-built intelligent applications. A new KPMG report on supply chain trends for 2024 notes that generative AI “has the potential to revolutionize supply chain management, logistics and procurement.” The report's authors call on companies to “reevaluate your current supply chain analytics team and prepare for an AI upgrade.”
Today's new supply chain BI capabilities provide an actionable, data-driven experience, such as interactive reports and dashboards, to procurement, operations, and reliability teams, from senior management to front-line workers.
This benefits both sides. Procurement managers can use verified demand signals to gain data insights into lead times, costs, delivery timing, efficiency and quality assurance. Line managers can also easily see any kind of gaps in performance and take necessary measures to correct those gaps. With increased clarity and visibility of MRO materials, decision making leads to improved business performance and savings to the bottom line.
Among other areas, GenAI is capable of:
- Procurement and Regulatory Compliance: Helping companies adhere to purchasing guidelines and regulatory standards.
- Manufacturing efficiency: Streamline production workflow, improve processes and reduce human errors. These factors contribute to overall efficiency.
- Virtual Sourcing Collaboration: Work with virtual assistants to handle routine inquiries, provide quick responses, and keep supply chain communications flowing smoothly.
It's an exciting time to be working in the world of intelligent supply chain. Get ready because the intelligent supply chain is about to redefine the rules of the game.
Freeing data from the shackles of “clean” data.
Earlier this year, I wrote in this column about the role of AI in cleaning up supply chain data and how AI makes sense of “dirty” and incomplete data, dramatically increasing confidence in the results delivered across the organization. Buyers and suppliers can rely on a “single source of truth” for data.
A purpose-built solution can apply data technologies that enrich and standardize procurement and operations data across systems. Ensuring that all parties are working from the same trustworthy and consistent data source eliminates the need for costly traditional data cleansing processes.
This is crucial because the more business is automated, the more we depend on the data that drives everything. Errors in MRO inventory may arise if data is incomplete or your team enters MRO material information under different names.
The way to overcome this is through intelligent AI applications designed for this purpose. In a supply chain model, these applications can read descriptions, identify items, and confirm quantities. Furthermore, AI systems also provide recommendations to the user to:
- Confirmation of stocks;
- Identify duplicate materials;
- Determine which materials will be shared between facilities;
- Recommending ideal storage locations;
- Revamp outdated storage policies
- Recommending order patterns based on consumption and lead time
With these systems, “trusted sourcing” takes shape, with increased trust in MRO data and collaboration between partners, buyers and suppliers.
Flexibility and agility
If you are a manufacturer with indirect inventory and MRO inventory, you will learn how poor or incomplete MRO data can lead to inventory discrepancies that lead to excess materials or severe shortages. These inconsistencies bring your plant to a standstill due to uncertainty and inconsistencies. This leads to line bottlenecks and potential production shortages.
That's why manufacturers should look to AI software to transform their supply chain operations. The supply chain of the future is not just about efficiency and flexibility. Organizations must adapt quickly, with greater visibility and traceability, to control risks.
The future of the supply chain lies in technological advancement. It's time for your company to enhance its existing technology stack with smart, purpose-built solutions and drive better results in your existing supply chain operations. Allowing a neural network to process data, analyze it, and recommend action is potentially a safer and more decisive plan to reduce costs, build value, and improve shareholder value.
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