A is for.... Artificial Intelligence

The leaders of the cognitive supply chain will be those who combine systems thinking skills with the traditional soft supply chain skills of empathy and negotiation

You would be hard pressed to find an event, an exhibition or marketing material in the supply chain space where the topic of AI is not being discussed. Although Artificial Intelligence is not a new topic, the rise of Generative AI (GenAI) has brought the topic of cognitive technologies and their disruption to traditional models to the mainstream conversation.

Note: We use the terms AI and Generative AI (GenAI) in this article for the purposes of illustrating the broader implication of cognitive technologies on traditional supply chain models. Whereas GenAI focuses upon the generation of new content, the line between the two becomes blurred when that content is new stock policies, lead times in the supply chain. Therefore we feel the term cognitive supply chain is more appropriate.

Not a case of if nor when...

In 30 years, a robot will likely be on the cover of Time Magazine as the best CEO.? Machines will do what human beings are incapable of doing.? Machines will partner and cooperate with humans, rather than become mankind’s biggest enemy - Jack Ma

The cognitive supply chain will be an amazing place. AI, combined with robots, will offer an ecosystem characterized by unprecedented levels of efficiency, resiliency and adaptability.

Predictions will be breathtakingly precise - everything from social media sentiment to weather patterns and global economic indicators. Supply chains will coordinate with each other across the globe creating a series of truly synchronous, end to end information flows.

Fulfilment will be done from a range of hyper-connected, autonomous warehouses where robots will not only handle the packing and loading of goods but will also coordinate with each other and learn from their environments with incredible levels of precision and quality.

If you think this is science fiction, think again!

It's not that this technology doesn't exist that it's not in mainstream adoption. The capability to achieve the cognitive supply chain not only exists, but is advancing rapidly.

• Neural network enabled #Pangu-Weather is an AI-based weather forecasting system producing stronger deterministic forecast results than traditional methods
• #Sprout uses AI to deliver document, topic and aspect base sentiment analysis on social media, predicting product trends before they arrive
• Autonomous trucks are envisaged to hit our streets in 2024 and if they drive to and from #Amazon warehouses, they'll already be met with autonomous guided vehicles in a warehouse system which by 2030 is predicted to have more robots than people!

Adoption and wide-spread use therefore not a case of "if", it's not a case of "when" but more a case of "how".

The traditional skill set is changing...

Advances in automation, artificial intelligence and robotics, while increasing productivity, will also cause major upheavals to the workforce. - John Hickenlooper

As humans, we will likely always need to handle elements in our work which require empathy, complex and emotional decision making and relationship management. All are traditional supply chain soft skills honed over years of negotiations, prioritizations and bargaining with suppliers, customers and business partners.

Machines, conversely, are rapidly overtaking us to handle tasks that require precision and strength as well as volume processing and decision support.

The #WEF Future of Jobs Report 2023 states that the highest net negative impact by technology in supply chain between 2023 and 2027 will be felt in what are arguably the individual, traditional building blocks of the supply chain.

Traditional hard skills such as material recording and stock-keeping used in inventory management, assembly and factory skills used in production, skills to drive cars and vans in logistics, material engineering skills used in research and development as well as product management, general management and operations management will all be (negatively) impacted by the rise of cognitive technologies.

So does this mean the human becomes less relevant in this cognitive utopia?

That depends.

For humans that can adapt, that can build upon the soft skills needed that make supply chain professionals successful, and build the capabilities and knowledge needed in the cognitive supply chain - the future is bright!

Systems thinking skills will thrive...

It is the fusion of these technologies and their interaction across the physical, digital and biological domains that make the fourth industrial revolution fundamentally different from previous revolutions - Klaus Schwab

Increasingly important, and a sentiment shared by 60% of organizations surveyed in the #WEF report, will be skills of systems thinking.

Systems thinking will mean the ability to architect the business opportunity that the rapidly developing building blocks of exponential technologies provide in a way that benefits the supply chain system as a whole, rather than individual economic units.

Systems thinkers occupy the space where business and technology overlap. Systems thinkers create value-add relationships beyond supply chain and beyond their own organization.

Out-collaborating the competition (with whom they will also collaborate), they will solve for the risks that arise when working with emerging technologies such as data privacy and ownership, cyber security and the ethics of AI. They will architect the emerging cognitive building blocks into always on, truly digital supply chain thread which thrives in new business models, products and services.

Put simply, systems thinkers will need to think and act differently.

Conclusion

Cognitive technologies are here and growing rapidly. The ability to move from individual use cases to systems thinking will be an important shift in the skills needed for the cognitive supply chain leaders of the future!

Be a #SystemsThinker: The Deloitte AI-Supply Chain Lab...

Together with my colleagues Marc Beierschoder and Fabien Lopez , who I also thank for their contributions to this short article, we run immersive lab experiences for AI and cognitive technologies in supply chain for our Swiss client base. Please don't hesitate to reach out to us to discuss how we can support you in developing your own systems thinking! I'd also like to thank Georg Ziegner from Deloitte Switzerland #SCNO for his contribution.

The above article is part of the #AtoZofSupplyChain, a 26 part series where we explore trends in supply chain and add a perspective from one or more experts in my network.