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5 Ways AI is revolutionizing supply chains

Moataz Rashad, Founder & CEO mr@deepvu.co @moatazr

http://deepvu.co @deepvuHQ

#aiSupply #aiSCM

Supply Chain end-to-end with an AI Layer

G L O B A L B I G D A T A C O N F E R E N C E

RequirementsPlanning

Sourcing/Procurement Manufacturing Quality

AssuranceLogistics &

Delivery

Artificial Intelligence

AI is revolutionizing an area with little innovation in over 10 years

Financial Mgmt

Supply Chain

Manufacturing HR

CRM

Purchasing

eCommerce/UX

Asset Mgmt Other

BI ๏Supply chain constitute 60-70% of Operating Expenses for manufactures

60–70%

Supply Chain dominates OpEx $$

G L O B A L B I G D A T A C O N F E R E N C E

✓Decision intelligence problems✓ex: add a new contract manufacturer to de-risk delivery date?

✓NLP language understanding problems✓Text understanding✓Conversational interfaces

✓Computer Vision problems✓Object recognition in images/video✓Visual Quality Assurance

Classes of problems ideal for AI

G L O B A L B I G D A T A C O N F E R E N C E

more datasets frommore products

*higher margin lift *improved ROI

Why it’s Strategic? the virtuous cycle for AI in supply chain

smarter neural networks=> higher performance +

faster trainingincreased investment on AI HW+SW

5 Ways AI is revolutionizing supply chains

G L O B A L B I G D A T A C O N F E R E N C E

• Demand forecasting accuracy impacts production & inventory planning

Excess InventoryLast minute higher cost logistics

• Traditional techniques unreliable & costly• Can’t predict farther out with high accuracy => Negative margin impact

Waste

#1 Planning: Accurate Predictions 5 Ways AI is revolutionizing supply chains

G L O B A L B I G D A T A C O N F E R E N C E

#1 Planning: Accurate Predictions 5 Ways AI is revolutionizing supply chains

• Demand forecasting & inventory planning with high accuracy• Predict farther out with higher accuracy• Continuously learning/self-tuning

accurate real-time demand forecasting

Ref# Customer SKU Qty Geo PO

amtPO date

Delivery

date

…

12345 C1 S1 1000 L1 $5M 8/27 9/3 …

12346 C1 S2 2000 L2 $9M 8/29 9/4 …

12347 C2 S1 1200 L7 $7M 9/21 9/25 …

Training on Historical Demand

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#2 Materials Sourcing: Optimal Pricing 5 Ways AI is revolutionizing supply chains

• BoM Optimization using predictive pricing• Mostly done manually using spreadsheets• Intelligently provide optimal BoM to save X%• Ability to constantly learn and improve vs using intuition

real-time supplier price predictionDate Supplier Part Price Discount

10/1 S1 123 12000 2000 …

10/1 S1 456 54000 4000 …

10/2 S3 123 11400 300 …

Training on Historical Pricing & Signals

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#3 Manufacturing Decisions: Predictive Maintenance5 Ways AI is revolutionizing supply chains

• Prevent equipment failures via predictive maintenance • Train on historical performance and IoT sensor feeds • Goals: Increase uptime; reduce production loss; minimize energy costs

G L O B A L B I G D A T A C O N F E R E N C ESrc: Bosch

• Decisions:• Schedule maintenance at specific time T• Turn off machines M1, M17,..

Manila RT production data

Shenzhen production data

Supply chain data

Sales plan & demand forecasting

delivers actionable decisions to optimize production plan

An AI assistant that empowers COO to make real-time risk management decisions

5 Ways AI is revolutionizing supply chains

#3 Manufacturing Decisions: Production Plans

+ New facility?

5 Ways AI is revolutionizing supply chains

• Production Planning decisions • currently mostly done manually using rule-based software

Training on Historical Production Plans & Revenue/Margin impact

G L O B A L B I G D A T A C O N F E R E N C E

#3 Manufacturing Decisions: Production Plan

Ref# Cust SKU Qty geo Fac1 Fac2 Fac 3 Delivery

Date

Revenu

e

Margin

12345 C1 S1 7M L1 3M 2M 2M 2016/07/01 …

12346 C1 S2 10M L2 5M 3M 2M … …

12347 C2 S1 12M L7 3M 4M 5M … …

Output: {{decision: F1:3.5M,F2:2.5M, F3:1M,

impact: $X, delivery: mm:dd, confidence: 73%},

{decision: F1:4M, F2:3M, F3:0, impact: $Y, delivery: mm:dd,

confidence: 68%}}

#4 Quality Assurance: Computer Vision5 Ways AI is revolutionizing supply chains

Visual Intelligence Engine analyzes raw images of parts and productsDAMAGED

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http://hcut.to/p/xwpHmP6Potato chipQA video

5 Ways AI is revolutionizing supply chains

#5 Delivery & Logistics: Self-driving Vehicles 5 Ways AI is revolutionizing supply chains

• Autonomous forklifts in the warehouse• Self-driving delivery trucks on public roads

• overcoming regulatory and security challenges

G L O B A L B I G D A T A C O N F E R E N C E

✓Collect as many relevant signals across various systems ✓higher dimensionality is always better fit for DL

✓Cleanse the data✓There’s no getting around pre-processing

✓Augment with external signals ✓Weather data✓Import/export signals ?

How to prepare for using AI solutions

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Summary: 5 Ways AI is revolutionizing supply chains

#1 Demand Forecasting & Inventory Planning:Accurate Predictions

#2 Materials Sourcing:Optimal Pricing

#3 Manufacturing Decisions:Production Plans & Predictive maintenance

#4 Quality Assurance:Computer Vision Detection

#5 Delivery & Logistics:Self-driving Vehicles

G L O B A L B I G D A T A C O N F E R E N C E

Summary: 5 Ways AI is revolutionizing supply chains

• Accurate predictions have a high impact on the bottom line

• Accurate demand planning reduces waste and environmentaI impact

• AI decisioning increases efficiency on the production floor & optimizes energy consumption

Every supply chain needs to adopt AI =>Improve competitivenessMaximize margins Boost your environmental impact score

#aiSupply #aiSCMG L O B A L B I G D A T A C O N F E R E N C E