The supply chain is an ecosystem that affects businesses around the world, and the COVID-19 pandemic has thrown a monkey wrench into this previously undisturbed process. With region-specific restrictions, limited supply of certain goods, and a constantly changing consumer mindset, almost all businesses are playing catch up in addressing the needs of every consumer. Add to that the oil price war and the result is near chaos for both consumers and businesses.

It may be a gamble to implement new supply chain systems in these circumstances, but it’s a bet that could pay dividends not just now but in the long term. Artificial intelligence (AI) and data analytics tools can provide the much-needed push companies need to keep their businesses afloat—and maybe even thrive—despite the global crisis. Supply chain sustainability has been a hot topic ever since the signing of the Paris climate agreement and sustainability here is not all about the environment but also about profitability. “Every dollar saved through supply chain sustainability efforts is a dollar for profitability,” says Patrick Penfield, professor of practice, supply chain management, at Syracuse University’s Martin J. Whitman School of Management.

In recent McKinsey research, 53% of companies reported increased revenues resulting from the introduction of AI into their supply chains and 61% reported a significant reduction in costs. Out of these companies, more than a third reported a revenue bounce of over 5%. Revenue from supply chain management was directly influenced by forecasting, sales and demand, spend analytics, and logistics network optimization.

Below are just a few ways AI and data analytics can help enhance supply chain management during the COVID-19 era.

From Insights to Action

The digitization of the supply chain is a vital step toward future-proofing your business, and if you haven’t made the switch to digital yet, the best time to do it is as soon as possible—if not now. The key to surviving the pandemic is responding to the changing demands and behaviors of consumers.

From Robotic Process Automation (RPA) or programming a piece of software to perform basic tasks across applications, the supply chain now relies on cognitive automation. This more advanced technology allows systems to go through large amounts of data and determine patterns that will help convert insights into actionable data. Cognitive automation mimics human thought and action while also removing the factor of human error from the equation. By speeding up data analysis and leveraging a variety of algorithms depending on the business need, it helps in making sound and timely business decisions.

From Manual Labor to Computer Algorithms

The large amounts of data gathered and that need to be analyzed grow bigger by the minute, and this has pushed businesses to shift to a “software-defined supply chain.” The challenges of supply chain professionals usually stem from inferior or legacy systems that do not respond to the call of the times. This makes the task increasingly challenging.

Automation has always been the battle cry of AI, and cognitive automation will help eliminate the challenges caused by too much data, too many applications, and simply too much information by doing the heavy lifting. It can perform data analysis faster and deeper than any human can, even going as deep as SKU level. Constant data crawls across applications allow data to be collocated in a single virtual data layer that can help discover supply chain bottlenecks and opportunities for improvement.

From Intelligent Guesses to Data-driven Decisions

From a reactive supply chain, big data has transformed the supply chain into a more predictive approach. Cognitive automation allows for decisions to be augmented with AI-driven predictions regarding actions that will optimize and improve supply chain performance. With the help of AI and data analytics, you can determine a variety of scenarios that could cost you valuable time, revenue, and other resources and come up with ways to avoid these scenarios or mitigate their impact on the business.

Because of the nature of AI systems, a cognitive automation platform can also act autonomously—with proper authorization, of course. It learns patterns and consequences the more data it ingests and it improves recommendations through time even if conditions change. This is a very helpful tool to have, especially during a crisis like the COVID-19 pandemic where business agility is key. You have to be able to pivot at a moment’s notice, and AI can help make a transition quicker and as smooth as possible.

In today’s all-digital, always-connected world, data, and information can change instantly. Businesses must be prepared to analyze large amounts of data in the shortest possible time so they can take action and make sound business decisions based on data-driven insights. AI and data analytics can bridge the gap between the supply chain and the digitization of businesses; with it, you can make insightful forecasts and take action while eliminating the guesswork. It will also push businesses to become more connected, agile, and scalable—equipped to face the current crisis and any others that may come in the future.