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Supply Chain
Industry 4.0, AI and the Smart Supply Chain
By Joe Zummo, U.S. Tech
its place in the supply chain. Also, what role can artificial intelligence (AI) play in the supply chain? At SM- TA International 2017 in Rosemont, Illinois, Scoop’s Philip Stoten was joined by Marie Cole, distinguished engineer at IBM, and Michael Ford, Aegis Software’s European market- ing director, to discuss the develop- ment of intelligent supply chains. Who better to discuss the role of
A
AI in the supply chain than the com- pany behind Watson, represented by one of its most distinguished and most published engineers, Marie Cole? Michael Ford too, is no stranger to these conversations, and in his role at Aegis, as well as previ- ous experience at Mentor, has been a prominent voice in the Industry 4.0
lot has been said about Indus- try 4.0 in the manufacturing process, but not so much about
dialogue. Aegis clearly sees the im- portance of materials management within any smart factory environ- ment, which is a key element of the company’s FactoryLogix offering.
Connecting the Supply Chain Stoten opened the debate with
the proposition that an Industry 4.0 or smart factory strategy needs to op- erate well beyond the factory walls, connecting up and down the entire supply chain. Cole explained IBM’s services in this area. IBM has its Wat- son Cognitive Supply Chain Insights offering that is under development. This helps clients to achieve real visi- bility into their supply chains. Cole said, “We need to have a lot
of data, monitor inventory, demand, look for disruptions and really get a better management method, without relying on a lot of manual interven-
1 2/25/16 4:28 PM
tion. That way, we can react quickly or even better, and work proactively.” Ford explained that Industry
4.0 has already driven real improve- ment. He suggested that inventory levels are generally higher than they need to be. With complete visibility through software systems, such as the one Aegis provides, these stock levels can be reduced, while main- taining tighter control and lowering the risk of lost or spoiled material. This accurate inventory drives
better planning, accelerates decision making and improves both delivery and financial performance. Ford un- derlined the importance of using dig- ital data throughout the value chain, using design data on the factory floor, and ensuring that data is deliv- ered without cost, a key digital link that has not yet happened.
Is AI the Missing Link? On the topic of IBM’s Watson,
Cole explained how the company is looking at disruption and using AI and analytics to monitor, predict and react quickly and appropriately. “In the midst of hurricane sea-
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son, it’s very interesting to look at Watson’s supply chain risk insights, where through The Weather Chan- nel, which is part of the IBM family, we have access to amazing data. We also monitor social media, to predict
YOUR SOURCE FOR SEMICONDUCTORS, RELAYS, SWITCHES, CAPACITORS, RESISTORS, AND MORE
flooding, power outages and who’s re- sponding. Overlaying this onto your supply chain network allows you to start to anticipate much better than in the past if particular supplier loca- tions are at risk,” said Cole. The offering helps to bring the
right experts together to create a plan to react and accelerate recovery.
An Industry 4.0 or smart factory strategy needs to operate well beyond the factory walls, connecting up and down the entire supply chain.
In many projects, IBM runs both its older systems and the Watson-driven systems in parallel, to compare accu- racy and performance and to meas- ure the benefits delivered. Ford, like Cole, agrees that AI is
the missing element that is needed to realize the potential of Industry 4.0 and the smart factory. Ford ex- plained, “In a world of rapid change, we all need to be thinking a lot faster than we did before, but we as hu- mans have natural limitations, so we need to deliver information in a man- ageable form that humans can di- gest, or allow AI to make some of these decisions, using a huge amount of complex data. It’s amazing to think of what’s going to come along in the next couple of years.” People still have a significant
role to play and Cole was quick to point out the importance of the in- tangible value that humans bring to the process. IBM views it as Watson cognitive AI, plus human interven- tion. This is where the company sees the most benefit, sharing our knowl- edge, our background and our experi- ence with high-speed processing and access to big data analytics per- formed in the cloud. Artificially intelligent supply
chains are coming and are part of a new augmented age. They will allow us to use our own skills and experi- ence alongside machine learning to drive better outcomes from accelerat- ed decision making. The power of AI cannot be underestimated, but nor should that of the human. However, it is likely to be some time before AI can replicate the intuition and expe- rience of seasoned supply chain pro- fessionals. r
A video of this interview is
available at
www.us-tech.com in the “videos” section, as well as on Scoop’s YouTube channel.
October, 2017
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