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Cognitive Sourcing Intelligence

>>AI: A New Partner for Supply Chain Professionals

“No office job is safe.”

So says Sebastian Thrun, Stanford Computer Science professor and co-founder of Udacity. A 2013 Oxford study predicted Artificial Intelligence (AI) will replace almost half of all US jobs. Yet most Americans don’t seem to be to concerned.

LevaData’s own surveys show that about two-thirds of Americans think AI will eliminate certain jobs. More than half of those surveyed think this technology will mean fewer jobs. But they don’t think it’ll happen to them. Over one-fifth think their jobs are safe for at least ten years. And more than forty percent are certain it won’t replace them ever.

This isn’t new. As far back as 1966, a report on technology, automation, and economic progress noted, “technology eliminates jobs, not work.”

Still, over a quarter of American workers expect to be working next to a robot soon. These employees have it right.

Are supply chain jobs immune to this? We’re not predicting the end of work either. But the future of procurement means a new partnership between AI and humans.

AI and the transformation of supply chain

In the last half-decade, many global manufacturers started major supply chain transformation projects. The use of AI and machine learning, plus advanced analytics and big data, are part of this. It’s clear AI is an ever more important part of the new supply chain.

There are three AI-based supply chain capabilities that are part of digital transformation.

First is demand sensing. This is the ability to understand and predict consumer behavior and sentiment. This allows greater alignment with demand management processes.

Second is the use of advanced algorithmic-based planning systems. These look at how to build AI that actually learns and improves itself. This provides an edge over traditional optimization algorithms based on heuristics.

The third application is supply sensing and optimization of procurement and sourcing,. Here, AI senses risks and opportunities, then recommend responses. Of particular interest is how this can transform negotiations with suppliers.

Perfect partner

The evolution of the strategic sourcing commodity management area is underway. Teams are smaller. Hence the responsibility per managed spend with suppliers per person is increasing. This isn’t about reducing headcount as in other areas of the supply chain through automation of functions like invoice validation or purchase order management. Here the challenge is different.

Instead, strategic sourcing is about enhancing the capabilities of professionals to increase effectiveness. True, AI increases productivity by reducing analysis time and manual spreadsheet creation. But AI’s impact here is even higher-level. This isn’t about the robot replacing repeatable tasks. It’s about the ability to leverage AI to support an employee’s core competencies. Only those who can’t take advantage of the AI’s benefits are at risk.

The next generation of procurement and supply chain leaders must cultivate new skills. In particular, they must be able to leverage data and analytics. Strong analytical reasoning skills are the new key factor in career growth. In some ways, even more so than relationship management or apprenticing.

Companies need to dip into this talent pool now. Existing teams need to retrain to adopt this new skill as much as they can.

This is a period of transition. Without doubt, AI’s impact on supply chain jobs will only increase. But it’s not as simple as replacing people with software. AI will change the game, but the most successful teams of the future will still be human run.

2019-02-16T00:42:03+00:00 April 17th, 2018|