In the article “Case Study: Using AI to Work Effectively with Carriers and Cut supply-chain Costs” for Smart Industry magazine, from June 30, 2023, Tom Moore analyses the possibility of optimizing supply chains using Artificial Intelligence at the example of ProvisionAi practice.
AI has become a mature technology in today’s rapidly evolving industrial world, significantly improving supply chain management. Integrating AI into transportation synchronization processes provides an innovative solution to the considerable challenges freight volume variations pose within supply chains. The source of the problem is the inefficiencies and unfavorable pricing scenarios offered by carriers when there is a volume change.
However, a breakthrough AI-enabled software can resolve this issue by utilizing AI and operations research to simultaneously manage flows across more than 300 lanes. Drawing input from several supply planning sources, this technology can help optimize limited resources while reducing transportation costs and ensuring consistent customer satisfaction.
The AI-enabled software runs a simulation analysis considering several potential constraints, including product prioritization, costs, loading constraints for each truck, and network constraints. It also adjusts optimized load quantities based on shipment requirements and associated costs and establishes network rewards and penalties for transporting within or outside specified periods.
Instructing the transportation-management system to reserve a vehicle based on simulation data, the technology enhances stock optimization capabilities compared to traditional planning systems.
These innovations have contributed to retaining preferred carriers at optimal pricing levels, increased first-tender acceptance rates, and attractive cost savings for the client, demonstrating strategic equipment positioning and minimizing deadhead miles.
In conclusion, AI has the potential to revolutionize supply chain operations, enabling businesses to reduce costs, enhance customer satisfaction, and increase efficiency.
This case study emphasizes the practicality of artificial intelligence by showcasing a successful optimization strategy involving the integration of AI into supply-chain planning and execution processes. The result was fewer deadhead miles, superior equipment positioning, and preferred carrier status with reduced transportation costs.
Such success cases underline that AI is ready for use and can transform supply chain management by revolutionizing traditional planning processes to achieve a competitive advantage.
Consequently, manufacturers worldwide can employ AI to optimize their supply chains, obtain significant cost reductions, achieve sustainability goals and ensure customer satisfaction.