I recently attended a panel discussion at Manifest 2024 with colleagues from Sony, USC, MattelMAT, and Forum Ventures. While it was interesting to hear what supply chain leaders were talking about regarding artificial intelligence, it was even more interesting to hear their thoughts on the future of supply chain and manufacturing.
The reality is that when you talk to manufacturing company leaders, AI is not the top priority. In fact, according to USC panelist Nick Vyas, other priorities (such as upcoming sustainability regulations) are more important to people he spoke to in India and Thailand than AI. I understand that. I also found the same thing.
Don’t get me wrong. AI is the key to building a connected manufacturing ecosystem with the predictive insights and streamlined processes you need. But it’s just one piece of the puzzle, and without human involvement, real-world applications are just noise.
what teeth What worries me most right now is tight budgets and unstable supply chains. Expectations for business expansion are higher than ever, and supply chain leaders need to accomplish more with less. And it is clear that these pressures continue.
Supply chain diversification and risk reduction
Solutions to supply chain instability vary depending on who you ask: onshoring, offshoring, nearshoring. These are all reasonable responses to supply chain instability, but the case for regional diversification has never been stronger.
I would argue that all supply chains are at risk in today’s world, but globalization is not necessarily the problem, so moving everything to the US is the best solution for US companies. It is not clear whether it is. At Fictiv, he migrated to four global regions to protect against some of these risks. I know other companies (like TeslaTSLA and AppleAAPL) are doing similar things.
Building strong relationships with suppliers across a geographically diverse network pays off. When a region is affected by instability, instability, or extreme weather, we have more opportunities to weather it and offset some, if not all, of the problems of a volatile global economy. there is.
According to Forum Ventures panelist Maia Benson, diversifying your sourcing makes sense. When a manufacturer spreads risk, it is easier to pivot if a problem occurs within the network. This helps build resilience.
Improving work efficiency
Another aspect of building a smarter, more resilient supply chain is understanding your workflows and automating them where possible. This goes back to the need for supply chain leaders to do more with less. My approach as a technologist is how to apply the best type of automation. When we define automation, we think about humans and machines. I think it’s very important to clarify the difference here. Everyone talks about his AI, AI, AI, but the real magic in manufacturing is in the interaction of AI and human behavior.
This is where AI can really help. Sourcing new suppliers, onboarding suppliers, requesting quotes, reviewing designs for manufacturability feedback, requesting order status updates, troubleshooting order issues, triaging disruptive supply chain events, and more. Everything involves a lot of manual labor. Combined, these tasks create significant friction and resistance in the sourcing and manufacturing process, and have a significant impact on your bottom line.
Today’s AI technology can automate many of these manual tasks, dramatically accelerating and streamlining the procurement process. For example, AI algorithms can instantly price parts for manufacturing, saving days or weeks of time on today’s quotes. Similarly, AI can analyze the manufacturability of parts and streamline communication between suppliers and engineers. AI-powered predictive analytics can also help with demand forecasting, inventory management, and supplier risk management. But again, the power of AI is determined by the data and the humans in the loop.
buy and build
A common question I hear about AI is, “Should I buy an AI solution or build one myself?” My advice is, if AI is going to differentiate you in the market and become a core part of your business, then build it. If not, if it’s not your core competency, differentiator, or revenue generator, then it’s probably wise to look at other existing solutions.
For example, if you look at all the parts listed on the bill of materials for the product you are building, which parts are important to your company’s differentiation? In your case, ask yourself: “Do I need to own this and that core strategy? Or is this part of another company’s core strategy?”
Mattel’s Greg Jabour agrees. On a recent trip to Asia, they looked at off-the-shelf solutions to automate manufacturing floor scheduling. Some of them are powered by AI. These factories have more than 5,000 employees, so scheduling is suitable for automation. Mattel considered these off-the-shelf solutions, but found their complexity to be daunting. In the end, they had no intention of working for Mattel, so they decided to make it themselves.
Future global supply chain
Looking ahead, we see a future where all parts of the supply chain are interconnected. And we’re focusing more on traceability, sustainability, and how companies like ours can be accountable, not just to regulators, but to ourselves. Our core belief is that we want to harness technology to unleash human creative potential. Technology and AI are great accelerators, but they work hand in hand with human potential.
Maia Benson foresees a real-time supply chain where human decisions are optional at core inflection points. For Greg Jabbar, it’s an integrated, end-to-end supply chain that is increasingly connected directly to the consumer. Mark Hanson believes that the future of supply chain is a continuous flow of data between the beginning and end of the supply chain.
Even when you cut through the noise, important truths remain for suppliers and manufacturers. In short, growing in this economic climate requires leaner operations, more agility, and increased profitability.
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