Why MENA businesses should embrace Supply Chain AI tools now
Supply chains are becoming more complex and are increasingly facing disruptions
The future of artificial intelligence in supply chains is now. This is the resounding message emerging from a recent research Info Brief published by the International Data Corporation (IDC).
“Companies need to act quickly to remain competitive and mitigate supply chain disruptions,” affirms Sergio Maccotta, Senior Vice President, Middle East & Africa–South, SAP, in this special contribution to www.logisticsgulf.com
The IDC, in a report, urges companies not to delay in exploring how AI tools can optimize their supply chains, pointing out that the immediate insights and learnings for future implementations gained will outweigh the benefits of waiting for future iterations of AI tools.
It is well known that supply chains are becoming more complex and are increasingly facing disruptions from multiple sources including geopolitical tensions, climate change-induced disasters, labor shortages, cybersecurity challenges and hyperinflation, to name a few.
Moreover, every disruption has a domino effect, impacting on all other players in the supply chain, as well as other sectors. In the case of the GCC, for example, a 2024 report by global consulting firm Oliver Wyman titled ‘Industrial Supply Chain Resilience: GCC Preparedness Amid Global Disruptions’ points out that the industrial sector in the region is an enabler for other industries.
This means disruptions in the industrial sector have a domino effect that can amplify vulnerabilities in vital sectors that are important for health, safety, and security.
Leveraging AI
To mitigate these risks, enterprises can leverage AI to better predict disruptions and minimize them. With AI’s ability to analyze vast volumes of data, understand relationships, provide visibility into operations, and support better decision-making, the technology is instrumental in enabling the modern digital supply chain.
Naturally, working out how best to introduce AI across the supply chain can seem daunting for businesses as it is evolving rapidly and there are some serious ethical and security concerns. Furthermore, AI is only as good as the data it is analyzing or trained on, so a major digital transformation may be needed to produce reliable, relevant and real-time data.
A 2024 global IDC supply chain survey found 48% of respondents cited legacy/on-prem systems, or integrations to these systems, as major impediments to their ability to respond to disruptions. Up-to-date cloud applications including cloud ERP are essential to obtain the full value from AI use cases and enhance the resiliency and sustainability of supply chains.
A useful first step for businesses looking to use AI to optimize their supply chains, therefore, is to assess their current systems and either move to the cloud or review their existing cloud ERP solutions to ensure they are working with the best possible data.
Systems upgrade
Upgrading systems need not be a daunting task. For example, SAP has two subscription-as-a-service (SAAS) offerings – RISE with SAP and GROW with SAP – that enable companies of all sizes to migrate their mission-critical processes to the cloud in the simplest, quickest and securest way possible, no matter their starting point.
These subscriptions include a comprehensive set of core solutions with embedded AI capabilities, and with SAP’s generative AI co-pilot Joule integrated into the system.
SAP customers also have peace of mind knowing the company was a pioneer in developing AI that is relevant, reliable, and responsible.
In fact, SAP recently announced its adoption of the 10 guiding principles of the UNESCO Recommendation on the Ethics of Artificial Intelligence, which aim to ensure that AI technologies are developed and used in ways that respect human rights, promote fairness and contribute to sustainable development.
How AI optimizes supply chains
AI is developing rapidly, with new partnerships, applications and use cases being created all the time.
SAP is working with leaders in the field of AI to enhance supply chains, for example, SAP and Google Cloud are expanding their partnership to help enterprises better predict and mitigate supply-chain risks and maintain optimal inventory levels.
This is achieved by integrating Joule and SAP Integrated Business Planning for Supply Chain with Google’s Gemini AI assistant and Google Cloud Cortex Framework’s Data Foundation based on BigQuery to forecast accuracy and allow supply chain users to react faster to demand signals that were previously hard to capture.
Generative AI capabilities will be a vital aspect in enhancing supply chain management. In the second half of 2024. Joule will identify the root causes of order delays and suggest corrective measures.
Joule—Expediting transportation planning
Logistics providers will be able to use Joule to expedite transportation planning and the intake of goods in SAP S/4HANA Supply Chain for transportation management, enhancing overall logistics efficiency.
In addition, generative AI-powered capabilities in SAP Transportation Management will expedite freight verification and documentation, enabling companies to achieve up to 50% faster inbound delivery note processing and reduce truck idle time at the gate by 40%.
The system will automatically extract, post, and check critical information from delivery notes, streamlining the validation of freight orders.
For manufacturers, SAP Business AI will significantly improve quality management. SAP Quality Issue Resolution will allow users to address recurring issues faster by using AI to bundle similar quality incidents and identify effective problem-solving processes.
SAP Asset Performance Management
Furthermore, AI in SAP Asset Performance Management will aid technicians, inspectors, and managers in visually inspecting asset conditions. Images collected from visual inspections can be easily annotated, displayed, and compiled into inspection alerts, facilitating timely and accurate maintenance decisions.
The AI-driven supply chain innovations rolled out by companies such as SAP in the forthcoming months will unleash a transformative wave of productivity, efficiency, and precision in manufacturing.
At the same time, AI-driven insights from real-time data will help companies use their own data to make better decisions across supply chains, streamline product development, and improve manufacturing efficiency.
Companies that do not embrace AI will find it increasingly hard to compete or catch up!
