Supply Chain Management: Using Conversational AI to Meet Demand

Companies are adopting conversational AI for improvements in metrics, inventory control, and supply chain management--allowing them to better meet demand.

A crucial enterprise function for any organization's success is the supply chain. The supply chain manager's job description includes all stages in getting a product into your customer's hands. Supply chain management (SCM) carries out these processes successfully, from purchasing raw materials to manufacturing, distributing to retailers or warehouses, and shipping the finished product to the client.

Unfortunately, disruptions in the supply chain have made it increasingly difficult for organizations to meet customer demand. While many of these disruptions occur early in the supply chain, lack of communication and customer service only worsen the customer experience - leaving customers underserved and unsatisfied. However, conversational AI can help manufacturers overcome disruptions and delight customers.

Supply Chain Digitization

Modern technology is at the forefront of this transition to a digitized supply chain. Industry 4.0 creates a disruption and requires companies to rethink the way they design their supply chain. Several technologies have emerged that are altering traditional ways of working, and customer expectations are growing: the online trend of the last years has led to increasing service expectations combined with a much stronger granularization of orders. There is also a very definite trend towards further individualization and customization that drives the strong growth of and constant changes in the SKU portfolio. The online-enabled transparency and easy access to a multitude of options regarding where to shop and what to buy drives the competition of supply chains.

To build on these trends and cope with the changed requirements, supply chains need to become much faster, more granular, and much more precise. Technology such as conversational AI can significantly help manufacturers keep up with the fluctuations of the supply chain in ways such as:

  • Increased automation
  • Improved transparency 
  • Crafting insights to ignite innovation 

Organizations have quickly adopted logistics, inventory control, and supply chain management software solutions. The administration, tracking, logistics, and truck route tracking of inventories all largely rely on RFID and barcode technologies. Keeping track of each step in your supply chain pipeline improves transparency. Recent technological developments are enabling businesses to make remarkable strides in automation. Modern technology's cutting-edge uses, such as drone delivery, driverless delivery trucks, and warehouse robots, are assisting in supply chain automation.

While these technology developments enable companies to improve their SCM procedure significantly, they also produce a vast amount of rich data. As a manufacturer, you produce Big Data at every stage of your SCM processes, from every request for parts or raw materials to every turn your delivery truck makes.

The role of conversational AI is to bridge humans with systems through conversation. A DRUID conversational AI assistant will add a conversational layer to your existing business applications - which automate your internal processes - and trigger the whole back-office mechanism to act on the data sitting within your company's technology ecosystem. As a result, you will be able to get your answers, and your tasks are done in a blink of an eye seamlessly.

Conversational AI leverages AI, Natural Language Processing (NLP), and Machine Learning (ML) to create human-like interactions and offer intelligent consumer insights. Organizations are already developing conversational AI solutions to enable applications that might help them optimize their operations after collecting decades' worth of data.

While there is a lot of enthusiasm and interest in employing cutting-edge supply chain operations technology like virtual reality and metaverse, there are already examples of how conversational AI is assisting SCM operations and helping to meet demand.


Support Demand Forecasting

Gartner report notes demand volatility as one of the main problems in the supply chain function. Businesses can make goods more accurately and in accordance with demand if they can predict it. This is especially crucial given the current crisis in the global supply chain. You can significantly inhibit the consumer experience of your business if there are unsold products on the shelves and not enough products to satisfy client expectations. Demand sensing makes estimates based on past data to address this issue.

While conversational AI cannot perform demand forecasting in the same sense as AI, it can significantly support forecasting processes. Each time the conversational AI agent interacts with a human, whether a member of your organization or a customer, it will record and analyze the interaction. This data can then be stored and used to support demand forecasting. For example, DRUID enables users to build complex data models that store and process data before sending it to other systems, through a tool called Entity Designer.

The virtual AI agent gathers data and enables latent correlations, including:

  • Historical sales history
  • Macroeconomic conditions
  • Marketing expenditures
  • Product evaluations
  • Website visits
  • External competition
  • Sales promotions
Using this data, the virtual AI assistant can then offer suggestions and provide data for you to use in forecasting. 


Enable Autonomous Planning

When autonomous planning is actively used, supply chains can operate more efficiently and with improved decision-making, even in the most unstable circumstances (like a pandemic, for instance).

Despite its technological foundation, autonomous planning calls for more than just hardware and software. This is due to the fact that it requires a change in the way organizations operate, including this fundamental set of principles:

  • Reduce human intervention by relying on automation to complete most operations, with manual interventions only needed to deal with exceptions and unique situations.
  • Throughout the supply chain, rely on advanced integrated analytics, going beyond the capacity of standard software for individual tasks to establish a clear connection between demand predictions and orders and the production schedule and plan.
  • Transform formal planning procedures—which are frequently slow, rigid, and reactive—into a more fluid strategy built on cross-functional touchpoints that are continuous and capable of proactively integrating real-time data.
  • Instead of giving the operations department sole ownership and control of the supply chain, hardwire processes and KPIs directly into business units.
  • Develop the ability of the business to change over time by testing out new use cases, taking lessons from past mistakes, and enhancing data and analytics capabilities.

Autonomous supply chain planning leads can enhance performance in several operations throughout the supply chain because it is so broad. Conversational AI enhances these capabilities, helping organizations bring data together for better decision-making while removing time-consuming processes. 


Increase Service Levels

With conversational AI, companies may predict customer behavior more precisely, fulfill demand with a higher level of certainty, and provide products with noticeably shorter lead times as they better understand and capture unpredictability in future demand through enhanced forecasting data. Demand is more granular and fragmented to meet the diverse fulfillment requirements in multiple categories and regional markets while accepting promotions and other factors that increase volatility.

An improvement in customer focus and organizational agility results in a 3–4% rise in revenuePlus, with increased service levels, your organization is guaranteed to see an improvement in the customer experience. It's a win-win. 


Optimize Your Inventory

While maintaining the essential service levels, inventory levels can be decreased by 10% to 20%, frequently with a proportional decrease in inventory costs.


Improve Planning Efficiency

With the support of your virtual AI assistants, demand planners may now focus on more complicated problems and improve organizational effectiveness thanks to automated execution, which provides an organization with a valuable instrument. Forecast demand signals are explicitly linked to the production schedule and plan, ensuring enough raw materials are available. Operations' overall cost and resource efficiency lead to a 5–10% decrease in supply chain costs, freeing up time and money to support investment and drive growth.


Interested in learning more about adopting conversational AI? Download our free guide.

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Meet Demand and Improve CX with Conversational AI

Manufacturers and retailers can no longer rely solely on past supply chain planning procedures in such a complex and variable market. Instead, by integrating conversational AI, businesses have a clear chance to improve financial and operational performance. Conversational AI is growing in popularity among the manufacturing and retail industries as more companies ditch their traditional methods of operation and opt for more technologically-advanced ones.

Businesses can deploy autonomous solutions and make sure they can compete - and thrive - regardless of what the future holds by embracing new technology, changing their perspectives on what is feasible, and being willing to test and learn over time.

Even beyond meeting demand, conversational AI can enable an improved customer experience for manufacturers. With 24/7 customer support and insightful responses, customers can get the support they need from your organization. This is particularly beneficial in regard to shipping delays and tracking requests. The virtual AI assistant will answer any customer questions with fast and accurate responses. By simply keeping customers in the loop, your company can significantly improve the customer experience while focusing your internal efforts on meeting growing demands.


Want to see how DRUID AI can help your business? Schedule a demo with a member of our team and experience firsthand how we can improve your supply chain management needs and meet your growing demands!


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