Artificial intelligence is enhancing the operations of retailers and consumer goods manufacturers, says Sivakumar Lakshmanan, chief executive officer of Antuit.AI, a Zebra Technologies company.

Typically, the supply chain has been highly focused on the tactical horizon — say, three to 12 months, says Lakshmanan. “That’s when you decide how much you're going to make, or how you’re going to distribute the inventory. That’s called sales and operations planning, and it’s a super important horizon. But the real decisions are between zero to 12 weeks. You’ve already decided what you're going to make, and you’re responding to the customer demand.” 

For far too long, Lakshmanan says, the shorter time horizon has been left to the planning community. However, with disruptions around COVID-19, geopolitics, supply chain constraints, the omnichannel and consumer-driven variability, things must change. “Companies increasingly see they need to respond better. That’s where short-term forecasting on the response to the demand comes into the picture.”

Don’t forget, he says, that short-term forecasting was done manually in the first place because it was thought to be too chaotic for technology to help. “But technologies are getting better at dealing with the chaos, particularly AI and cloud technology. And you increasingly see companies benefiting from leveraging them to get the short-term forecast [and] response to the demand right.”

Example: Multiple retailers are throwing orders at a manufacturer that has a short window to decide how to allocate inventory. Should it respond to the orders as they come? Or hold some inventory for future orders? “Mostly, these decisions are left to people sitting at the warehouse, and whoever makes the most noise gets the inventory,” Lakshmanan says. “But technology can help you optimally assign inventory based on your fill rate commitment to the retailer, how you’re tracking with your margin, and the market share goals you have. So technology can be very handy.”