Artificial Intelligence and Industrial Growth
Supply chain problems are currently causing a blockade to anyone trying to get their products into its intended industry on time. However, organizations like Microsoft believe that artificial intelligence is the way forward to solve this problem. While the continuing issues are in part due to the war between Russia and Ukraine, there are other significant contributors like China and the stringent lockdown policies that are keeping electronics and raw materials from being shipped globally.
Recently, Microsoft rolled out a software solution to solve the global supply chain problem. The Microsoft Supply Chain Center is designed to work with organizations using built-in collaboration between its data and applications. According to Engineering.com, Microsoft’s supply and demand insights module relies on Azure AI to predict upstream supply constraints and shortages. Will this technology be the solution to the global supply chain problem?
Revolutionary Technologies
AI is a significant revolutionary element of the upcoming digital era. Tech giants like Amazon, Google, Apple, Facebook, International Business Machines Corporation and, of course, Microsoft are investing significantly in the research and development of AI. These companies are working toward the goal of making AI more accessible for enterprise use cases. The hardware and computational density requirements of this space is easily 25% of the value of the market. Again, another vertical that was virtually nonexistent just two or three years ago and was not on the radar to affect the chip fab market.
Global Growth of the AI Market
In 2020, the global artificial intelligence market was valued at $62.35 billion. The artificial intelligence industry is expected to expand at a compound annual growth rate (CAGR) of 40.2% into 2028. What does this mean? By 2030 the artificial intelligence market is set to grow into a $980 billion industry or more.
The continuous research and innovation directed by the tech giants are driving the adoption of advanced technologies in industry verticals, such as automotive, healthcare, retail, finance and manufacturing. However technology has always been an essential element for these industries, but artificial intelligence has brought technology to the center of organizations. AI is being infused virtually into every apparatus and program from self-driving vehicles to crucial life-saving medical gear. This poses the question: Can AI solve the ongoing issue?
The Supply Chain and AI
We know that AI is here to stay and will make waves in various industries because companies like Microsoft constantly research it for market solutions. Forbes explains, “Artificial intelligence is another area of technology investment that holds potential, and early results are promising. A study out of McKinsey calculates that AI-enabled supply-chain management has enabled adopters to improve logistics costs by 15%, inventory levels by 35%, and service levels by 65%.”
Nevertheless, these are early results so are these predictions true? Jonathan Wray, co-founder of Aible explains, “AI is not a magic bullet. It can’t eliminate inflation or supply chain issues. The most productive role for AI in the supply chain at this point, however, is “in prioritizing optimal actions and testing different scenarios to plan the best course of action.” While AI might not be the answer to our global supply chain, it can help on a smaller scale by developing custom workflows and low-code solutions.
Need more insight for your organization? PCX can help you find more sustainable solutions for supply chain optimization.