From the CEO: How will AI change supply chain management?

AME | June 23, 2023

Either this letter will leave you insatiably curious or it will leave you furious, maybe both. My hope, as always, is that it makes you think. When it comes to new technology, I tend to land on the side of curiosity. A career in continuous improvement has shown me that being frustrated by new technology, whatever its implications, does no one any good. Creation is a one-way street. We cannot go back, only stay curious and optimistic while gathering the facts and evaluating the possibilities.

Unless you’ve managed to stay unplugged since ChatGPT’s release in late 2022, you’ve probably challenged it or at least heard stories of its many capabilities. But just in case you haven’t, ChatGPT is a language model trained through a combination of machine algorithms and deep learning techniques to simulate realistic and complex human conversation based on the input it receives.

It’s one of the fastest-growing applications of all time, with an almost frightening range of applications. It can perform tasks ranging from writing code to screenwriting television pilots to developing cocktail recipes. It even passed several law and business exams (albeit not with flying colors and certainly not something I am advocating for.) A member of my team recently received a job offer to train an AI model how to perform her work with the goal of eventually using it to replace her.

One application now buzzing across our professional sectors is how ChatGPT can be used in industry supply chains. Speculation aside, I was curious and wanted to assess ChatGPT’s resourcefulness. So, I asked it this fairly open-ended question, “Where and how can ChatGPT help supply chains?” The answer was long and extremely comprehensive in the following areas of applicability:

  1. Demand forecasting
  2. Inventory management
  3. Order tracking and customer service
  4. Supplier management
  5. Supply chain optimization
  6. Risk management
  7. Sustainability and ethical practices

Coming from a supply chain background, these are critical focus areas. Wouldn’t it be wonderful if ChatGPT could indeed, as it shared, help mitigate risks within the supply chain by monitoring external factors such as weather conditions, geopolitical events or regulatory changes? How about being able to provide early warnings and suggest contingency plans to minimize disruptions? There is so much more to know. Interestingly enough, it concluded by arguing against our dependence on it, pointing out that while it can provide valuable insights, automate tasks, enhance decision-making and improve operational efficiency within the supply chain domain, final decisions should still be made by human experts considering domain-specific knowledge and expertise.

We are just tipping the iceberg with AI’s capabilities. As this technology continues to evolve, we will all be watching to see if it delivers on its promises and, more importantly, if and how it can be integrated into our operations as a truly lean resource.

The theme of our 39th annual international conference could not be more relevant to this conversation. This year is all about ReImagining Excellence, which means looking at your operations in ways you haven’t before. The AME Cleveland 2023 International Conference will, as always, contain valuable sessions around industry technology, and I’m excited to hear what companies across the globe have to say about AI and its implications across their enterprises.

I’m eager to hear your thoughts on this. If you have any insights or made any personal discoveries about ChatGPT, please reach out and share.

As always, please stay safe and keep looking out for one another.