AI Opens New Frontier in Supply Chain Planning
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AI Opens New Frontier in Supply Chain Planning

Ben Unglesbee
Supply Chain Dive, 2023
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8

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Some of the steep challenges supply chain managers face in forecasting upcoming demand date back to COVID. The pandemic threw a wrench into conventional forecasting, complicating and altering expected consumer behavior with shutdowns, inflation, and other shocks. As a result, companies overbought, resulting in swollen inventories. This proved costly for business and for society more broadly. Writing for Supply Chain Drive, Ben Unglesbee explains that many companies migrated to artificial intelligence (AI) and machine learning solutions to develop alternative supply chain management solutions. He offers insight into how and why companies are using these tools and how they might manage expectations.

Summary

Companies need better forecasts and inventory planning.

The pandemic threw a wrench into conventional forecasting processes, complicated by consumer behavior, shutdowns, inflation, and other shocks. Companies of all sizes over-ordered, purchased or manufactured too much, and ended up with inventories that were swollen beyond reasonable levels. Consequently, they had to carry excessive surpluses proportionate to how far their demand forecasts were off the mark. 

Subsequently, consumers who were coping with spikes in the prices of necessities changed their purchasing patterns, once again rendering forecasts untenable.

Now many companies are taking a new look at forecasting or relearning it from ...

About the Author

Ben Unglesbee is a senior reporter with Supply Chain Dive.

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