How AI is improving warehouse performance and easing supply chain disruptions

by | Jul 28, 2022 | Technology

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Unlocking greater performance gains in warehouses using artificial intelligence (AI) and machine learning (ML) helps make supply chains more resilient and capable of bouncing back faster from disruptions. Unfortunately, the severity and frequency of supply chain disruptions are increasing, with McKinsey finding that, on average, companies experience a disruption of one to two months in duration every 3.7 years. 

Over a decade, the financial fallout of supply chain disruptions in the consumer goods sector can equal 30% of a year’s earnings before interest, taxes, depreciation and amortization (EBITDA). However, Fortune 500 companies with resilient supply chains achieved a 7% premium on their stock price and market capitalization. 

Resilient supply chains are the shock absorbers that keep ecommerce, retail, grocery, and post and parcel businesses running despite the quickening pace of disruptions. Hardening supply chains to make them more resilient pays.

Closing warehouse gaps strengthens supply chains

Unexpected delays and undiscovered warehouse mistakes cost the most to fix and wreak havoc across supply chains. Warehouse managers, planners and expeditors rely on decades-old processes based on Microsoft Excel spreadsheets. But, with increasing costs, pace and severity of disruptions, warehouses can’t react fast enough with these manual systems. As a result, “Operations managers are spending hours collecting data and entering it manually into Excel spreadsheets, taking valuable time away from managing and optimizing warehouse operations,” Akash Jain, Honeywell connected enterprise general manager for connected warehouse, told VentureBeat. 

Warehouse accuracy and performance further slow down because decisions made on the warehouse floor that impact margins, costs and revenue trade-offs often don’t make it to the top floor. Senior executives need to know how split-second decisions on which orders to ship impact inventory carrying costs and total inventory value. Runaway inflation makes inventory valuation one of the most expensive risks to manage today.

Stress-testing supply chains often uncovers the largest and most costly gaps in warehou …

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