Can artificial intelligence cure our supply chain woes? It may help, but only to an extent. With the holiday shipping season upon us, we may start putting nascent AI-driven processes to the test. But ultimately, it takes skilled people — supported by intelligent robotics, planning, and analytics — to make things happen.
The skills shortage may be the most fragile link in today’s stressed supply chains. While economic headwinds may tamp down acute labor shortages in the short run, labor shortages may inhibit companies’ abilities to move massive amounts of goods and deliver on-demand services.
Skills shortfalls in supply chains is the top concern for 2,000 supply chain executives, cited 57% participating in a survey by MHI, a supply-chain industry trade association, conducted earlier this year. Demand for supply chain talent—specifically tech-focused talent— “has surged following a series of disruptions to global trade,” says Kelton Kosik, head of supply chain at Ware2Go, a UPS company offering on-demand warehousing and fulfillment services to merchants. “But an aging workforce, shutdowns and unmet demand is creating skills gaps for companies.”
The labor shortage — with ensuing high costs — is creating issues for companies or merchants relying on supply chains, “ultimately impacting their profitability and brand loyalty,” says Kosik. This lack of talent will especially be felt “during peak shipping seasons like Amazon Prime Days, Cyber Monday and holiday sales events, impacting everyone.”
Primary areas seeing labor shortages include transportation and logistics, manufacturing, and health care, says Lan (Vicky) Luo, assistant professor of supply chain management at the University of Hartford. “But this does not simply stem from a lack of workers—it’s also a lack of workers with a particular skillset and a rapidly rising demand from consumers. Think about how much online ordering increased during the pandemic; it’s a habit that’s remained strong. Those orders require shipments of cargo, and drivers to transport the items.”
Technology and automation will help with demand forecasting, labor allocation, production, logistics, and delivery, Kosik says.
Technology and artificial intelligence “will provide a lot of desperately needed intervention for the companies and organizations that can afford it,” Luo says. This is especially the case “for those that aren’t extremely labor-intensive, and for those that produce a very standardized product,” she continues. “If a business can’t necessarily use AI for production and mission-related tasks, it may be able to use technology to more efficiently generate forecasts, conduct analyses, and produce marketing materials, thereby saving labor.”
A positive result of this growing confluence of technology with elevated human skills may be a “supply chain renaissance,” says Paul Noble, founder and chief strategy officer for Verusen. “Supply chain technology will continue to grow, help support human labor challenges, and augment humans to achieve additional productivity and take more strategic measures.”
In today’s environment, “you need talent that is agile and can collaborate with all members of the supply chain,” Luo says. “Make decisions from the whole chain’s perspective.”
That’s because supply chains are “now unpredictable, and we need to expect that change will continue at a rapid pace economically, politically, and then with our supply chains,” she continues. “We need to build up the ability to change quickly. In the before times, companies had favorite suppliers and relationships; today, that style may not hold true for many industries.”
Skilled people that can assemble and adapt to changing conditions — supported but not replaced by AI — are the most important link in supply chains, Kosik agrees. “The future of digital warehousing is not about replacing humans with robots but embracing automation as the means of transcending human limitations,” he says. “This digital evolution will enable warehouse staff to move quickly to keep up with growth and volume, but it also helps scale a merchant’s business quickly and profitably.”
This article was written by Joe McKendrick from Forbes and was legally licensed through the DiveMarketplace by Industry Dive. Please direct all licensing questions to [email protected].
