All supply chains are designed to handle changing conditions, but not every supply chain is resilient and agile enough to respond to major disruptions.
That's why COVID-19 had a devastating impact on global supply chains.
A Blueprint for Managing Supply Chain Disruptions
This study serves as a blueprint to prepare for global supply chain disruptions and examines how artificial intelligence (AI) can better position businesses to reduce risks.
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Significant demand upside for staple goods and lower demand
Hoarding of essentials such as hygiene products and canned goods.
Retail stockouts at most grocery stores.
Panic buying resulted in demand shock across the world.
The rapid, unprecedented change in buying behavior made demand planning difficult.
Customer behavior shifted
Weekly forecast error sharply increased
Average Error in New Normal
Average Error Before Pandemic
Manufacturers couldn't keep up, resulting in unmet demand and loss of sales.
The stockouts resulted in losses, which made it more difficult and costly to acquire and serve customers. Bottom lines eroded, and return on capital and shareholder value dropped.
Some business leaders turned off AI and chose to rely on human instinct during the disruption. They assumed AI can only interpret and respond to events it has seen in the past and were concerned it couldn't handle the unprecedented events caused by COVID-19.
Demand Sensing Advantage
Those who utlilized proven, at-scale AI reaped
They experienced more than 30% less error in their forecasts and were more easily able to meet demand.
The challenges of managing disruptions of any size in supply chains cannot be solved by people alone.
This new normal of increased disruptions is not temporary - it's here to stay.
The combination of AI, technology, automation and real-time data are critical for enabling agility, efficiency and resiliency.
Companies that harnessed AI saw a 30-37% demand sensing advantage, even during the peak of the pandemic.
The pandemic made supply chains harder to run and old methods of predicting demand were no longer sufficient.
The advantage of utilizing AI is clear:
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