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Whether you are “all in” on artificial intelligence (AI) or a skeptic, the reality is progression is happening daily and the opportunity to capitalize is now. Many manufacturers and distributors are rapidly adopting AI, automation, and smart technologies to streamline operations, improve efficiency, and enhance customer engagement. AI and associated automation are going to transform industries over the next decade, providing significant value to those who develop a strategy for adoption and scale. McKinsey predicts that generative AI could add up to $4.4 trillion annually of total value to the global economy across just a subset of use cases they reviewed. With ongoing challenges from supply chain disruptions, labor shortages, and broader climate and sustainability goals, now is the time to engage your organization and ensure you are not left behind at this inflection point.
Organizations are already establishing a culture of innovation and leveraging AI for automation and real-time data-driven decision making. No matter where you are on this journey, we want to share some practical AI application opportunities in the short term for the manufacturing and distribution sectors.
Although this blog does not start with your strategy, you can reference our previous content here: Is Your Business AI Ready?
Below are a few areas that we see as immediate value-add to most organizations for increasing efficiency, improving products, optimizing delivery, and enhancing your customer experience:
AI-powered chatbots and virtual assistants handle customer inquiries and order processing, which in turn can reduce manual intervention, speed up response times, and lower operational costs. Connecting these capabilities to AI-powered analytical models and dashboards can help organization better understand demand, predict trends, and dynamically link to procurement operations and production schedules. This ensures manufacturers can meet market demand without overproduction or stockouts while also capturing more revenue.
Real-time inventory visibility through automated systems enables more precise inventory control, reducing carrying costs, and the premium costs associated with stockouts of materials or finished products. Whether leveraging computer vision or technology on the manufacturing and warehouse floor to track consumption and movement, inventory is a great starting point for digitizing supply chain and operations to achieve greater transparency, agility, and efficiency.
AI-powered systems including use of computer vision technology can inspect products throughout the manufacturing process to identify defects often with greater speed and accuracy than manual inspection. These automated systems reduce rework and waste during the manufacturing process while similar systems can provide quality assurance at the end of the production run or as part of order picking and packing prior to distribution. The results include higher quality, reduced returns, and improvements in customer satisfaction.
Leveraging AI-enabled route optimization tools allows your team to analyze multiple data sources to reduce time “waste” associated with manufacturing floor layouts or delivery routes while also reducing the company’s carbon footprint or fuel use. These capabilities can easily analyze patterns and provide recommendations while also integrating data associated with traffic, weather, and vehicle telematics data to optimize as needed. These tool sets allow you to optimize for employees and customers, limiting disruptions and complaints from both parties.
Independent of the use cases you tackle first, the time to act is now. The reason? Companies are already tapping into the latest AI products and tools, whether with prototypes or full-scale deployments, to find benefits in the immediate term. The investment required for AI automation is also coming down as new startups bring tools to the marketplace while large software and cloud providers make models available for custom developed solutions. Here are a few real-world examples to highlight the progress by several companies to date and why you shouldn’t wait to be in the “late majority” to adopt.
Greenplan, a DHL-financed startup, has developed an AI-driven algorithm that optimizes delivery routes by considering variables such as traffic patterns and vehicle capacities. This approach has led to cost savings of up to 20% and a 70% reduction in computing time compared to traditional methods, contributing to more sustainable logistics operations.
PepsiCo, in collaboration with Microsoft, has implemented an AI-powered monitoring system to enhance the consistency of its Cheetos production. Utilizing Microsoft’s Project Bonsai, the system continuously analyzes product attributes such as density and length, enabling real-time adjustments to the extrusion process. This innovation has led to improved product quality, reduced waste, and increased operational efficiency.
Migros, a leading global grocery retailer, partnered with invent.ai to implement an AI-powered inventory optimization platform that dynamically forecasts demand and automates replenishment decisions across 30,000 SKUs and 2,000 stores. This solution reduced inventory days by 11% and increased product availability by 1.7%, enhancing customer satisfaction and freeing up working capital for strategic initiatives.
AI and automation solutions allow you to transform operations by reducing costs, boosting efficiency, improving accuracy, and enabling scalable, resilient growth.
As you refine your AI strategy and consider the potential use cases tied to business goals, contact us to discuss a readiness assessment and conduct workshops to validate the business cases. UDig is positioned to review your overall strategy, validate data readiness, implement risk mitigation tactics, and ultimately partner in execution and change management to implement these solutions. Our aim is to ensure you achieve your target return on investment but also position your organization for continued growth with AI.
John Mayberry leads a portfolio of vertical markets for UDig. He brings over 15 years of experience working with clients in this vertical to implement innovative custom solutions, modernize technology portfolios, and oversee programs that address clients’ top strategic initiatives.
