Manufacturing supply chain management is nearing an age where software goes beyond analysis and recommendations to autonomously execute decisions. With the growing impact of artificial intelligence and machine learning, businesses can access real-time insights to detect emerging supply risks and take proactive measures to counter potential disruptions.
In this Q&A, Darcy MacClaren, SAP’s chief revenue officer of digital supply chain, explains what companies need to know about AI, how to balance cost with innovation and what the optimal “anti-fragile” supply chain looks like.
Most Read on Manufacturing.net
Nolan Beilstein (NB): What do companies need to know about AI in preparation for its role in supply chains?
Darcy MacClaren (DM): Integrating AI into every level of the supply chain network will unleash a hyper-predictive and efficient logistics organization that revolutionizes the flow of goods from the factory floor to consumers’ hands.
However, for supply chain leaders looking to integrate AI with existing solutions, it is vital to ensure AI is relevant, reliable and responsible, so business outcomes can be achieved in a secure, compliant way. We are witnessing the proliferation of generative AI-driven digital assistants across enterprise portfolios, transforming the way businesses run by allowing users to ask questions in plain language and receive quick, contextualized responses.
NB: How can companies balance innovation with cost concerns when implementing new technological solutions?
DM: Many companies that cut corners on diversification, supply chain technologies and other resilience measures have recently been finding out the true cost of those decisions. But when companies invest in diversification, supply chain technologies, and other resilience measures, there are many potential business benefits, including:
- More efficient operations: Greater resilience often leads to minimized risk and greater ability to invest in innovation and growth.
- Improved productivity: Resilient supply chain technologies contribute to an overall rise in productivity across the system.
- Risk reduction: Resilient supply chain technologies reduce risk by allowing visibility into all operations across the network and empowering businesses to optimize and adapt their processes and logistics in real time.
NB: What does the optimal “anti-fragile” supply chain look like?
DM: Anti-fragile supply chains are powered by technologies that allow companies to keep up with regular disruptions, react to production trends, changes in demand and global events in real-time. While not every disruption can’t be planned for, extreme weather events for example, proactive planning allows organizations to navigate this new normal.
By implementing data-driven technologies aimed to increase resiliency, such as AI and machine learning, businesses gain the real-time insights needed to identify emerging supply risks and proactively respond to potential disruptions.
Over time, these advancements could lead to a completely new supply chain experience, as those equipped with new tech and tools will help reveal new business opportunities as well as improve lead times, offering more effective executive review cycles and managing inventory levels quicker.
NB: How will policy and governance changes affect supply chain strategies in 2025?
DM: As the coming year brings a potential shift in policy and governance priorities, businesses will need to adapt their supply chain strategies to comply with evolving regulations and back up their sustainability claims.
In the U.S., we are likely to see incentives to produce and buy domestically, prompting companies to rethink how they track materials at every step, reinforcing accountability and supporting sustainable practices throughout the supply chain.
As a result, leaders will prioritize technology investments that improve supply chain visibility and transparency. By leveraging real-time insights, companies can effectively manage risks and enhance collaboration among partners, enabling them to monitor operations and safeguard against unethical practices.
NB: How will these trends affect supply chains after 2025?
DM: This era will be defined by software that not only analyzes and recommends, but also has the ability to autonomously execute decisions. This will empower supply chains to operate with minimal human intervention, allowing for greater efficiency and responsiveness to changing market conditions.
The evolution of supply chain management software has been remarkable, and we are now at a point where the end-state of autonomy is within reach.
Click here to subscribe to our daily newsletter featuring breaking manufacturing industry news.