There’s no denying it – artificial intelligence (AI) is going to have a massive impact on the supply chain industry.

Your employees know it and it’s making them nervous.

Read on to find out what’s happening with AI in supply chain and what to tell your staff about the coming changes.

What Change Will AI Bring?

The numbers being reported are awe-inspiring.

AI is delivering some very good news to companies.

Up to $2 trillion will be saved per year in supply chain and manufacturing thanks to the rise of AI.

Global consulting firm, McKinsey & Company, estimates that up to $2 trillion will be saved per year in supply chain and manufacturing thanks to the rise of AI.

On the other hand, the future isn’t quite so bright for people working in the industry.

The World Economic Forum (WEF) report, ‘The Future of Jobs 2018’, estimated that the rise of machine learning and algorithms in the workplace could cause the loss of up to 75 million jobs across all industries by 2022.

The same WEF report also found that more work will be done by machines than by humans by 2025. 

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However, the same WEF report suggests that there will be an overall net increase of 55 million jobs as new types of work are created over time. 

At the individual job level, roles such as data analysts, AI and machine learning experts, and software engineers will see job growth over the next years. 

Clerical and general administrative roles such as data entry clerks, accounts clerks, and secretaries will be at risk over time.

Even if there is full employment, scenario modelling suggests that, by 2020, up to 375 million workers will need to switch occupational categories.

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AI In Supply Chain – What’s Happening?

The $2 trillion estimated by McKinsey to be saved each year by AI in supply chain and manufacturing is a huge number but we’re already seeing evidence of AI-generated savings in the industry.

Rolls-Royce has started operating autonomous ships developed with Google. AI-led technology removes the need for 20 people per Rolls-Royce ship.

UPS has seen huge savings from its powerful ORION system (On-Road Integrated Optimization and Navigation). ORION’s AI and machine learning algorithms analyze endless variables to give UPS drivers optimized sequences in which to deliver packages. 

AI doesn’t come cheap though. ORION was estimated to cost UPS around $250 million to develop. However, the company quickly recovered the cost and the system is expected to save $300 – $400 million annually.

There are many other companies taking action on AI, such as Infinera which is banking on using artificial intelligence to turn around lacklustre business performance. The company is using AI to improve its delivery date accuracy by assessing multiple variables on an ongoing basis.

Work With Your Supply Chain Employees On Your AI Planning

Fear of job losses from new technology is nothing new.

In the 1960s, a special research panel assembled by President Lyndon Johnson found that “technology destroys jobs, but not work.”

Job losses from technological and economic changes have even been captured in pop culture in songs like Billy Joel’s Allentown and movies such as Gung Ho starring Michael Keaton.

However, there is some good news.

More data continues to emerge to show that employees are ready to embrace artificial intelligence in the workplace.

Oracle’s major study released this year found: “Employees believe that AI will improve operational efficiencies (59 percent), enable faster decision making (50 percent), significantly reduce cost (45 percent), enable better customer experiences (40 percent) and improve the employee experience (37 percent).

The fear and the risk appears to be that companies are not thinking hard enough about the potential impact of AI on employees. This potential impact includes job roles (in terms of size and scope) as well as employee engagement levels. 

As you plan to talk to your people about this topic, reflect on how you plan to help them develop their skill sets so that they stay ahead of the curve. 

Recall the charts above that show the decline of administrative and clerical jobs. How will you help these people upskill so that they can use their business and customer knowledge in a more advanced way? 

Companies that don’t plan ahead or seek to develop new opportunities for their staff will likely turn to layoffs as technology takes over some aspects of work.

Remember, when companies go through downsizing exercises, they invariably lose a large chunk of corporate knowledge and corporate memory. This loss affects everything from customer service to sales through to general morale within the company. 

Don’t get caught in the trap. Plan ahead and use the knowledge of your employees to develop better ways to service your customers.

Script To Use When Discussing AI At Work

It’s generally better to communicate openly and frequently with your staff about any change in the workplace. AI in supply chain is no different.

Here are some talking points you can use to communicate with your staff.

Note the language to use: ‘we’ not ‘you’ so that the overall message is: “We’re all in this together.” You’ll find that your message will be better received this way.

  1. AI is coming whether we like it or not.
  2. As with any change, there will be good and bad aspects.
  3. On the plus side, AI can make our jobs easier and less stressful so we can focus on what we do best. 
  4. On the downside, there is the risk that some aspects of our jobs can be taken over by AI as time goes by. Not just your job but mine too and those of people higher up in the company too.
  5. It can take time and money for companies to implement AI systems. Should our company ever introduce any AI technology, we’d all be involved and there’d be plenty of communication.
  6. We should all do two things (1) Embrace the idea of AI. It’s not going away so there’s no point putting our heads in the sand and being left behind. (2) Think ahead and start upgrading our skills and knowledge while we can. Work on skills that are harder for computers to do – reasoning, negotiating, helping tricky customers, those sorts of human skills.
  7. Finally, there’s no reason to panic. Just make sure you start your planning and self-development now and, of course, ask for my help. Even if you develop your skills and AI never gets used here, you’ll have become even more valuable to the company so it won’t be wasted effort.

Next Steps

Artificial Intelligence is going to be a major productivity benefit to supply chain companies. 

To enjoy the benefits of AI in the supply chain workplace, you’re going to have carefully and respectfully manage its impact on your employees’ lives.

Get in touch with us here.