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How to Build Smarter Supply Chains with AI

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Disruptions affect supply chains in different ways. Some companies may experience a massive surge in demand, while others may experience a severe downturn. The key to supply chain resiliency is having the agility to manage through disruptions. Expanding electronic data interchange (EDI) with application programming interface (API) capabilities enables a more flexible B2B integration approach with partners to keep supply chains moving forward. IBM believes that EDI in its various formats will remain highly useful and widely used in its established areas for years to come. However, it will not be the primary tool to solve new challenges in the supply chain that require more than a typical B2B document exchange. Instead, emerging technologies like IoT, blockchain-based networks, and AI will drive those investments, with a unified platform for API and EDI transactions working alongside.

Emerging Technologies

Chief Supply Chain Officers (CSCOs) seeking to drive true business innovation while continuing to drive down costs will succeed primarily through the imaginative and synergistic application of these emerging technologies, but in ways that build on existing investments in proven, business-critical technologies like EDI. Research by IDC[i] projects that organizations will gain a 335 percent ROI with modernized B2B integration – or more than $4 in benefits per $1 invested. What will CSCOs seek to achieve from their investments in IoT, blockchain, and AI technology? How will these technologies complement EDI and API integration? The application of these technologies is far-ranging, but IBM believes it is ultimately rooted in business outcomes driven by a renewed emphasis on multi-party supply chain collaboration. As usage and interoperability across trading partners expand, CSCOs can also capitalize on a much faster ROI than traditional EDI usage models.

IBM believes that organizations must take a fresh look at and “double-down” their investments in working together with partners. In this way, they can achieve shared goals and outcomes that ultimately deliver on a superior end-customer experience in coming years.

  • Despite billions of dollars in IT investments over many years and numerous industry studies on the value of collaboration, supply chain collaboration remains in many respects “unfinished business” with tremendous upside opportunity to drive new levels of supply chain excellence.
  • EDI provides essential core electronic document exchange and a path to scale this dramatically with standardization.
  • Introduce IoT to provide the possibility for a dramatically enriched near real-time event generation and delivery environment.
  • Add blockchain to provide a new distributed ledger backbone, a tamper-proof record of relevant events that deliver a “shared state” for all supply chain participants.
  • Add AI technology to provide predictions, recommendations, and advanced automation to augment human productivity.
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The Future of EDI and AI Technology

Multi-party collaborative automation is technically feasible today but requires innovation in business practices. For example, it requires the use of AI agent technology to perform multi-party process orchestration, leveraging blockchain, and multi-party application integration. This solution presumes that proven technologies like EDI, APIs for seamless and modern connectivity, and ERP and supply chain management applications like order management, warehouse management, and transportation management are already in place and performing their well-proven roles to support the higher-order collaborative process. However, the true future lies in using and evolving B2B integration alongside disruptive technologies such as IoT, blockchain, and AI, delivering innovative levels of multi-party supply chain collaboration.

Foundations for Building a Smarter Supply Chain

A more intelligent supply chain, powered by AI and blockchain, provides greater visibility and insightsinto the end-to-end supply chain – including the transactional lifecycle and partner ecosystem. It leverages the power of AI to connect and correlate data from dispersed and disparate systems and sources and sorts through data overload to provide new insights and relevant alerts. It complements and elevates existing systems and investments.

AI can also help you proactively predict, assess, and mitigate disruptions and risks. A smarter supply chain that leverages this technology builds significantly more resiliency and responsiveness. Leading companies are learning firsthand how these disruptive technologies enable improved efficiency and reduced costs. They represent a new era of supply chain management, complementing and elevating existing solutions across planning, sourcing, inventory, fulfillment, logistics, and supply assurance.

When you combine AI and blockchain, the impact is exponential. Supply chain solutions can embed these technologies in meaningful ways to drive improved insights and usability of the vast data affecting supply chain organizations. From correlation and anomaly detection in business transactions to gaining insights by tapping into internal and external data sources, organizations can proactively get ahead of events with these technologies. When AI and blockchain are combined, they enable a powerful platform that provides both a source of shared, immutable data for suppliers and partners – with the capability to identify trading partner behaviours and events immediately.

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IBM Solutions Embedded with AI and Blockchain[ii]:

  • Leverage AI for visibility across your B2B transactions to detect anomalies before they impact your business.
  • Realize multi-party transaction visibility from the order through delivery powered by IBM blockchain.
  • Capitalize on AI to break free from supply chain visibility challenges and act with confidence to mitigate disruptions.
  • Gain a real-time global view of inventory to grow sales, protect margins and increase customer satisfaction.
  • Modernize order management and transform your fulfillment capabilities with AI.

Business Transaction Intelligence

Part of IBM’s Sterling Supply Chain Business Network, Business Transaction Intelligenceis an AI-based tool that allows companies to see anomalies and search transactions in a straightforward way. Companies can leverage Watson AI across their entire B2B transaction lifecycle to:

  • Gain deeper visibility to enable faster, more informed decisions.
  • Reduce cost and increase efficiency through streamlined partner collaboration.
  • Use machine learning to identify anomalies rapidly.
  • Deliver demand-driven, trusted B2B integration in the cloud.

Master Lock, a company that develops and manufactures security products, wanted to provide its internal business users with self-service access to real-time data about transactions to better support customers, suppliers and finance projects. The company partnered with IBM to implement the AI-powered Business Transaction Intelligence solution combined with their IBM Sterling Supply Chain Business Network. Ultimately, Master Lock not only achieved the expected results of enabling users to more easily find and track business transactions, but they were also able to quickly identify and rectify inefficiencies in technical EDI processing with partners.

IBM solutions leverage the power of AI and blockchain to help organizations architect for the future and build a more intelligent supply chain that’s more resilient, agile, and customer-centric.

[i] IBM eBook, The Future of EDI: An IBM Point of View, April 2021

[ii] IBM Sterling Business Transaction Intelligence Demo