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FMCGs

5 Ways Artificial Intelligence & Robotics Can Transform Your Supply Chain

Perihan El Etreby
Copywriter at Intouch.com - M.A. in Creative Writing from Bath University
December 1, 2021
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Due to the strong reliance on labor for manufacturing and logistics during the pandemic, many Fast-Moving Consumer Goods (FMCG) items were unable to reach end consumers. The pandemic served as a wake-up call for the entire business about how to leverage technology and use it to stay afloat during a crisis.


Major Challenge for FMCGs: Manual labor issues in material handling 

From raw material to material processing, to the movement of finished goods, manufacturing processes rely heavily on human labor. Packaging and transportation are labor-intensive operations that not only generate physical but also mental stress to employees, resulting in lower productivity levels.

 

Other challenges

Due to serious safety concerns regarding the human workforce and commodities, market leaders have been careful when employing traditional heavy machinery for material transfer such as forklifts, battery-operated pallet trucks, and so on. Also, the lack of real-time data – particularly for items in transit – is a great barrier to attaining operational efficiency.

 

5 Ways AI Can Help With Supply Chain Digital Transformation


• Operational Efficiency Is No Longer Just An Option

Previously, it was tricky for consumer products companies to pinpoint areas in their supply chain where operational efficiencies were required. Today, FMCG companies can analyze their production lines and swiftly detect inefficiencies thanks to new algorithms. It’s important to increase your visibility over logistics operations and focus on each stage of the chain. Artificial Intelligence gives you automated and accurate insights to help you with that.


• Starting At The Source: Tracing the path to resilience & sustainability

Given the complex nature of global supply chains, it has been difficult for certain organizations to measure how they are performing against sustainability criteria in the past. With the help of AI, businesses will be able to get rapid insights into their corporate sustainability performance in areas like food waste and palm oil sourcing thanks to the availability of data.


• Say Bye Bye to Historical Sales Data and Welcome a More Accurate Forecasting with Demand Sensing

Organizations frequently either underestimate or overestimate demand. This is because standard supply chain management software forecasting methods rely on historical sales data to predict future demand. Because historical patterns rarely match what is happening right now, this technique diminishes prediction accuracy. By combining internal and external data coming in from all ends into a data center, AI-powered supply chain management software puts the past behind. The real-time data is rapidly retrieved from here in order to optimize processes.

The outcome?

  • Increased revenue
  • Reduced costs
  • Shorter lead times
  • Better inventory management and working capital


• The Cost’s Domino Effect 

When it comes to sourcing, supply chain managers must grasp how a little adjustment in the cost structure can have a domino effect on the product or service's final prices. As a result, precision is critical for estimating projected pricing based on cost factors such as raw materials, energy consumption, transportation, packaging, storage, byproduct credits, fixed costs, overheads, and profits. An AI-powered engine examines current pricing, evaluates trends and market index, and compares should-cost to actuals to provide cost evolution insights and cost variation warnings.

The outcome?

  • Having an edge when bargaining with suppliers, and understanding the impact on the supply chains when fundamental cost shifts take place.
  • You will be able to scale resources and efficiently manage risk. And, certainly, increase your savings.
  • Monitoring organized, multi-layered cost models, optimizing real-time price fluctuations to help category managers and sourcing experts.

 

• Your Inventory Can Make You Or Break You: “Real-time Data” is your secret to success 

Remember, customers hate going to a store and not finding the products they want!

Scattered data, lack of real-time information and slow, manual processes are the enemies of your inventory and warehouse management systems, leading to inefficient operations.

  • Overstocking or understocking problem: is your current system flexible enough to respond to external events that impact inventory-related decisions?

AI provides a standardized view of real-time inventory across all locations, suppliers, vendor-managed inventory, and inventory across multiple ERP systems to the supply chain management system. You can see the type of materials, where they are placed, and their availability in real-time. You can also have a snapshot of which materials may be in low supply based on shipments data, and solve the problem on the spot.

  • Warehouse management system: is your system supporting transactions between warehouses on a day-to-day basis?

With an advanced AI solution, your software should link with warehouse systems and different ERPs so that managers can deal with efficient and connected warehouse transactions. This reflects more accurate inventory tracking and smoother execution of processes such as picking, packing, shipping, receiving, put-away, cycle-counting and physical counting. 

The Outcome?

  • Reduced costs and risks
  • Better operational efficiency
  • Optimized inventory and warehouse management that are monitored in real-time

What Do Studies Say?


Summary: Benefits of Using AI in Supply Chains?

  • Reducing operations costs, better inventory & warehouse management, and enhanced safety.
  • From being inelastic, the supply chain becomes responsive.
  • Acting on real-time data, instead of making predictions by analyzing old patterns.
  • Moving away from unoptimized cost management methods to more dynamic models that serve future plans.
  • End-to-end visibility into inventory demand and supply, reducing wastage, minimizing business risk and increasing working capital.

With the help of AI, ML, and IoT, you can ensure that customers have a positive experience and that your business operations run smoothly. With today's increased competitiveness, it's more important than ever to improve productivity by decreasing uncertainties and working on error-free strategies. 


Imagine utilizing data in the best way possible to understand what your customers need exactly? Imagine having an increase in sales due to the real-time data you monitor on a daily basis? Contact us and get introduced to Intouch Ads; FMCGs’ most advanced solution to give you the insights, real-time data, and increase in sales number that you deserve.

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