A resilient supply chains offers a great deal of promise for companies looking to reduce their risk in relation to extended periods of economic stress. Unfortunately, it is also accompanied by a great deal of risk. The phrase resilient supply chains sounds good, but the devil is in the details. For every robust network, there will be at least one 'broken link'. In order to have a strong resilient supply chains, there must be a high degree of redundancy within the supply chain, and this too can work in the direction of reducing overall risk.
A resilient supply chain relies on an adequate number of redundancies throughout the whole chain, but to a limited degree. To ensure that the most companies are not put at risk, a strong supplier selection process must take place. This will help to reduce the level of uncertainty about the health of the network. An appropriate combination of quality and quantity will ensure that the best suppliers are called upon at critical times and that the largest number of outages can be avoided as much as possible.
A robust supply chain can also rely on real-time data and information exchange. Real time data exchange enables one supplier to instantly provide detailed information about its inventory and orders to another. Supply chain managers can make use of artificial intelligence to further streamline this process. They can build a comprehensive knowledge base of real-time inputs and apply this to their overall operations. Once all the relevant information has been assimilated and collated, then real-time input can be used to make informed decisions about inventory availability and even forecast demand, which is known as artificial intelligence or AI in supply chain terms. Using artificial intelligence for your supply chain allows you to respond more quickly to changes in the market and minimize the likelihood of long term impact upon your business.
How can artificial intelligence affect the resilience of resilient supply chains? One of the most significant effects artificial intelligence has to offer is an improvement in decision making. Decision making is normally a human task that takes a long period of time to make correct decisions. Artificial intelligence approaches mean that real time input from a variety of sources can be used to improve the quality of decisions being made. Some of these decision making models can take into account previous data, historical data and other external factors, whereas some use data only, so they are more robust.
Another important effect of using artificial intelligence in your supply chain is to make decisions on the basis of real-time information. Artificial intelligence systems are able to take full advantage of the internet and web 2.0 technology to access critical information rapidly and make decisions on the fly. For example, some may decide to order in bulk to save money. In real time the internet can show how many units are in stock and how quickly they are selling. This will allow your suppliers to accurately predict their stock levels and to meet orders at the ideal time.
The three technologies that I have mentioned above, when combined with each other, offer the possibility of making better decisions and therefore reducing the level of risk and creating a more resilient supply chain. Resilient supply chains to reduce the costs involved with your businesses' overall operations and increase the overall profitability of the business. As supply chain reliability and profitability are closely associated, you should consider investing in these technologies as part of your overall supply chain management policy.