Supply Chain World - Fall 2017 - 21

S&OP INNOVATION SUMMIT

Machine learning can analyze
large data sets to better determine orders from suppliers so
store shelves stay stocked.

Upcoming Event
The S&OP Planning Innovation Summit brings
the leaders and innovators from across different industries for a summit acclaimed for its
insight into the supply chain process.
On Sept. 27-28, hear from the following
confirmed speakers:
* Jeff Chaput, Senior Director, Supply Chain
Planning - The Honest Company
* Darshan Patankar, Director, Supply Chain,
Inventory Management - Reyes Holdings
* Murray Jackson, Head of CDMA Supply
- Ericsson
* Simon Blamires, Director, Regional Supply
Chain, Newmont
* Mark Dagostino, Director Supply Chain BSH
* Tripp Durham, Director of Supply Chain
Strategy - Schneider National
To save $100 on your two-day pass, quote
SCW100 at checkout.
To register, search "S&OP Innovation Summit" online or contact the event manager Dean:
at 415- 799-9986 or dmarshall@theiegroup.com.

chain, where we could eventually see
end-to-end automation. In Gartner's
recent "Predicts 2016: Reimagine SCP
Capabilities to Survive," the research
firm said supply chain organizations expected the level of machine automation
in its supply chain processes to double
in the next five years. Given the pace of
change already, it is likely this estimate
is conservative.

Machine Learning
Its uses in the supply chain are many,
from manufacturing to logistics. Its
most important function, though, is in
reducing risk.
Firstly, machine learning will remove
risks to employees by taking them out
of more menial jobs, particularly those
involving heavy machinery in which
accidents are more likely to take place.
For example, it is machine learning that
makes driverless cars work. Just recently Apple confirmed what many suspected, that they in addition to Google,

Amazon, and car companies including
Volvo, are also investing in this area.
Once governments get serious about
putting the infrastructure in place for
driverless cars, it is only a matter of time
before we see widespread adoption.
Driverless cars will soon become
driverless trucks, automating the transportation of goods. Similarly, machine
learning will decrease the need for
warehouse workers. ARC did a survey on
investment priorities in the warehouse
this year and about 15 percent of warehouse executives said that procuring
autonomous mobile robots in the next
three years was a priority for them.
Perhaps the most important application next year in AI for supply chain
managers will be in the ability of machine learning algorithms to analyze the
wealth of data coming in from Internet
of Things and other sources. Unlike
standard supply-management software,
machine learning systems can collect,
analyze and adjust large data sets from

a wide variety of sources efficiently and
cheaply, combining every piece of data
from internal factors such as staff sick
days through to external sources such as
weather data. This can then be used to
build a complete picture of where stumbling blocks could arise and exact levels
of demand to ensure that there is never
an unnecessary surplus of stock.
This is a particularly pressing issue
for grocery. If you order too little, customers will lose patience with empty
shelves and go elsewhere. If you order
too much, food will go off and you will
be left with a huge amount of waste.
According to a McKinsey report, early
adopters of machine learning for replenishment in retail have already seen
a number of benefits. These include
reductions of up to 80 percent in stockout rates, reductions of more than 10
percent in days of inventory on hand
and write-offs, and gross margin growth
of up to 9 percent.
FALL 2017 Supply Chain World

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Table of Contents for the Digital Edition of Supply Chain World - Fall 2017

Contents
Supply Chain World - Fall 2017 - Cover1
Supply Chain World - Fall 2017 - Cover2
Supply Chain World - Fall 2017 - 1
Supply Chain World - Fall 2017 - Contents
Supply Chain World - Fall 2017 - 3
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Supply Chain World - Fall 2017 - Cover3
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