Manufacturing and supply chain management are complicated operations, which often leads to waste, according to Freightflows CEO Matt Morgan.
"Any time that there's complexity, machine learning and AI can add significant benefit," Morgan said in an interview with Supply Chain Dive.
The MAPI Foundation, a group that advocates for the manufacturing sector, says AI can optimize various stages of the supply chain from warehouse management to supplier relationships, according to a recent report.
One example is Procter & Gamble's use of AI and Internet of Things (IoT) technology to automate warehouses and distribution centers. P&G was able to automate delivery of about 7,000 SKUs and cut supply chain costs by about $1 billion annually, the MAPI Foundation noted in its report.
Noha Tohamy, a distinguished vice president analyst at Gartner focused on supply chain analytics, said the findings of the McKinsey survey were in line with her experience.
The two main benefits of AI adoption are increased efficiency (doing more with less or the same capacity) and decreased cost. The cost reduction is not typically the result of decreased headcount but rather improved forecasting. AI can provide better answers more quickly and "can improve my market share or my ability to make products available," Tohamy explained.