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Artificial intelligence can predict demand for supply chains

Capgemini
2020-07-02

Studies have shown customers are willing to pay more if they can get a great experience. Customer loyalty is now based less on price or product than on the experience they receive from a brand. And customers are getting more demanding about process, services, and options.

The challenge for the supply chain is delivering the right product when the customer wants it. That means predicting demand and managing supply needs that have yet to become apparent. This challenge is greater now during the pandemic, as shopping behaviors are changing and are tough to predict. Add in the complexity of consumers having a choice of suppliers for most products, and how do you build brand loyalty at a time when it is hard for retailers to differentiate?

Retailers are facing new competitors. For grocery stores, this includes all specialty stores, online food-preparation offerings, and even Amazon. Also, lifestyle sites are working to create demand for products consumers don’t really need.

All these factors make the supply chain web even more complex. Supply-chain professionals not only need to figure out fulfillment but try to understand what people want before that demand is even visible.

The good news is companies probably already have the information they need. The challenge is capturing and then analyzing the data so it can be used to make business decisions.

By activating data, the supply chain can get a better pulse on what customers need – and even what they want. Artificial intelligence applications depend on trusted data to learn patterns. Using structured and unstructured data, AI and machine learning can analyze vast amounts of information and provide real customer insights. It looks for patterns and trends that cannot be compiled in a spreadsheet.

The magic happens when AI makes data correlations without human intervention, with structured and unstructured data. (Unstructured data includes emails, photos, and video files and can be garnered from a number of sources.) It is about anticipating customer demand and being proactive instead of reactive. It means companies can adjust more quickly based on the data, delivering a better response to market disruptions and other competitors.

AI and machine learning add value to the supply-chain equation. The combination of structured and unstructured data holds the key to a better understanding of customers. Knowing what people want before they want it is how you succeed.

Cyndi Lago is Vice President at Capgemini Invent. She advises clients on supply-chain execution strategy and digital transformation. Connect with her on operations management, e-commerce, analytics, and strategic planning at cyndi.lago@capgemini.com.

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