How Automation And AI Could Impact On Supply Chain Roles

How Automation And AI Could Impact On Supply Chain Roles

How Automation And AI Could Impact On Supply Chain Roles

While the technology has been widely adopted, it is constantly evolving. Thus, there is uncertainty surrounding its overall impact, particularly on specialist functions within the supply chain.

Some fear that the technology will change its human counterparts, while other experts suggest it’ll function in unison with people, encouraging them to concentrate on higher-value opportunities. Amidst all of this doubt, one thing is for sure: AI and automation will change how we function.

One side of this coin: a workforce replaced

Recent improvements in AI and automation imply that the abilities of computers and robots will probably surpass that of workers in a lot of tasks. Consequently, when these advanced technologies also become more cost-effective, the workforce is going to be automated away.

Workers will not just be substituted in low skilled occupations such as warehousing and transport. However, with advancements in automatic forecasting, exception handling, and supply chain planning, proficient roles will also be at risk. One study has forecasted that roughly 47 percent of US jobs are in danger of computerization. Another study looked at the consequences of robots in labor chances in US manufacturing and found significant declines in both wages and employment.

On the flip side: a work force enhanced

The opposing and more optimistic view is that there will be an AI-driven change in the workforce, as technology increases the capability of workers that are not in direct competition with it. Whilst technology will probably depress employment for some forms of labor, it has the potential to produce new needs and openings through “creative destruction”. This gives rise to the prospect of a complementary effect.

The free effect is illustrated by looking at the introduction of the spreadsheet in the early 1980s, initially with VisiCalc and then Lotus 1-2-3. This made working with large quantities of related data much easier without the time consuming and error-prone methods. Suddenly, you could alter commodity costs, currency exchange prices, component prices, or interest rates and instantly see the effect on earnings and profits into the future. In the finance and accounting discipline (e.g. in “supply chain fund”) it simplified regular bookkeeping and made many tasks simpler like modeling alternate scenarios.

The spreadsheet hugely influenced the requirement for bookkeepers (44% less in number between 1985 and 2017) but greatly increased the demand for people who could run the numbers on this new software such as accountants, financial managers, and management consultants. In the USA between 1985 and 2017, the positions of attorneys and auditors had increased 41 percent to 1.8 million, while fiscal managers and management consultants had nearly quadrupled to 2.1 million.

An expert opinion

Some take the pessimistic view, believing that advances in AI and automation are at a tipping point, and machines will soon be better than humans in many activities. When access to this technology becomes more mainstream, it’ll be the “default option” for businesses. Consequently, there’ll stay a couple of highly compensated employees employed and the remainder will probably struggle to find work, or be stuck in jobs that are poorly compensated, unstable, and stressful.

Bootle considers that AI and robotics will ultimately drive economic growth and release people from doing mundane, boring, and unfulfilling jobs while creating new jobs in areas that will always require a human touch and those which need social, collaboration, and design skills.

Even with both sides putting forward believable arguments, recent history hasn’t been in a position to support the optimists or the pessimists. Unemployment is a record low, which suggests that automation has not led to labor displacement. On the other hand, economists are pointing out that the increase in overall productivity attributed to technology has been consistently disappointing. Although Erik Brynjolfsson, who studies the economics of information technologies, indicates in his justification of the productivity paradox, that measurements of the impacts may be time postponed, and the incorrect (“old market”) measures are used.

When one door closes, another one opens

Whatever side you support, what is certain is that technologies AI and automation are all set to alter many supply chain functions as we know them. This will cause tremendous disruption in supply chains and also for workers to stay necessary, they will need to contemplate re-inventing themselves.

Changing customer expectations will also be set to have a monumental effect on supply chain functions. The rise of next day’ delivery means customers expect products and services within their hands faster. Whilst the increase in AI and analytics means a more lively experience has become the norm. To provide these businesses must devise a totally new approach to architect, design, and manage supply chains across broader ecosystems, new technologies, and new functions and skillsets.

Whilst there are roles being replaced new supply chain functions are also being created. These tasks are increasingly focused on working right in customer-facing sections. The new customer co-creation paradigm will induce the need for supply chain professionals, who may orchestrate the silos across organizations, while at the same time leveraging the latest modeling and analytical instruments for both insights and decision making.

Also read: 5 Trends Of Last-Mile Supply Chain Trends To Look For In 2020

These brand new highly cooperative roles will demand the Implementing of AI and automation. This can help to make intelligent decisions around new product attributes, product portfolios, product pricing and distribution, community design, merchandise flow paths, capacity, inventory positioning, and transportation modes. Digital Twin technology will be key to making these nimble trade-offs, in order to deliver in an environment of ever-changing client demands, at new heights of speed and scale.

Adoption of AI and automation is becoming widespread across the supply chain, and it’s only growing. On the other hand, technology should help existing workers, not replace them. Now is the time to focus on achieving a harmonious relationship between humans and machines, working hand-in-hand to deliver a more sustainable and efficient supply chain to deliver greater business outcomes.

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