How AI is Working for Today’s Supply Chain Heroes

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Recently, I came across a Forbes article listing the top ways Artificial Intelligence (AI) will impact enterprises in the near future. Coming in at number two after “smarter decision making,” was a “streamlined supply chain.” While that may surprise some, it makes perfect sense to me. Because when it comes to meeting digital-era demands, every function of marketing and commerce has a role to play, including the supply chain organization.

That’s a lot of pressure, especially in the face of today’s complex, global supply chain ecosystems, most of which are still hindered by manual processes and point-to-point communication. Add to that a staggering amount of siloed structured and unstructured data that’s nearly impossible to fully leverage in real time, and you’ve got a recipe for some seriously frustrated supply chain leaders.

And yet, in our work with clients across industries, we see these leaders stepping boldly into the front office. Despite persistent legacy challenges, they are embracing their new role as brand stewards. They are actively seeking out ways to preserve decades of IT investments, while transforming supply chains from cost centers to opportunity drivers. Truly, they are the heroes of supply chain, and I’m proud that IBM’s early and ongoing investment in AI for supply chain is paying off for them as they champion change.

Real-Life Supply Chain Heroes

Last month in San Francisco, we were honored to have several supply chain clients join us on stage at Think 2019 to share how they’re using AI right now to drive new value. Mylene Ortiz, Senior IT BPSA – Supply Chain, at Petco, shared how they’re using Business Transaction Intelligence (BTI) to deepen visibility into the end-to-end transaction lifecycle, quickly resolve supply chain issues, and enable self-service for business users.

BTI is an AI capability embedded in IBM Supply Chain Business Network (SCBN). Available to all SCBN clients, BTI extends transactional visibility to business users, giving them access to the information they need within highly technical EDI data – without having to involve IT. Using natural language, business users simply type in a question and Watson understands the query, correlates the right data, and provides an immediate answer. Machine learning ensures BTI gets smarter with every query and higher-powered analytics help supply chain leaders spot anomalies in transaction data to resolve issues before they impact the business.

For Ortiz, BTI has been a game changer. “What used to take 2-3 days to resolve, can now be resolved in seconds,” she said.

Rick Bingle, Senior Vice President of Supply Chain for REI, also joined us at Think to share how Watson Order Optimizer (WOO) is helping them transform their omnichannel strategy. When REI realized they were saying “no” to customers 800,000 times a year because they weren’t accessing inventory across their 155 stores, they partnered with us to put WOO to work.

Part of our IBM Order Management solution, WOO leverages AI to understand the value of every piece of inventory and recommend the most effective fulfillment action for the business and the customer. It then uses machine learning to recognize patterns over time to provide better future recommendations. It allows REI to quickly optimize fulfillment while also reducing order fragmentation and cost-per-package. As Bingle shared with our audience, just the ability to enable Buy-Online-Pickup-In-Store (BOPIS) generated enormous value, creating a 27% lift on every online purchase picked up in store, while eliminating freight costs and increasing “connectivity” to the brand.

“We turned the system on, and it immediately started delivering results,” he said.

We look forward to sharing more stories about supply chain heroes from other industries in the coming months. Follow me on LinkedIn to learn more. ______________________________________________

If you’ve got a few minutes, listen to Mylene and Rick discuss the value of AI in their own words: 

• See Petco session highlights (1:57) / Watch the full keynote (01:13:20)
• See REI’s session highlights (10:18) / Watch the full Trends & Directions session (00:45:34)
• Read more about REI’s AI story in Internet Retailer