Discovering new patterns in supply chain data has the potential to revolutionize any business. Machine learning algorithms are finding these new patterns in supply chain data daily, without needing manual intervention or the definition of taxonomy to guide the analysis. The algorithms iteratively query data with many using constraint-based modeling to find the core set of factors with the greatest predictive accuracy. Key factors influencing inventory levels, supplier quality, demand forecasting, procure-to-pay, order-to-cash, production planning, transportation management and more are becoming known for the first time. New knowledge and insights from machine learning are revolutionizing supply chain management as a result.
Ten ways machine learning is revolutionizing supply chain management:
1. Machine learning algorithms and the apps running them are capable of analyzing large, diverse data sets fast, improving demand forecasting accuracy. One of the most challenging aspects of managing a supply chain is predicting the future demands for production. Existing techniques range from baseline statistical analysis techniques including moving averages to advanced simulation modeling. Machine learning is proving to be very effective at taking into account factors existing methods have no way of tracking or quantifying over time.
2. Reducing freight costs, improving supplier delivery performance, and minimizing supplier risk are three of the many benefits machine learning is providing in collaborative supply chain networks.
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