Predict, Not Just Respond

How to Make Supply Chains More Intelligent

Meet Genie©

Intelligence implies a lot of things and it happens to be a moving target. As soon as we figure out how it is done or what it is then it no longer requires intelligence. So, what does “intelligent” mean? From dictionary, Intelligence is the ability to learn facts and skills and apply them, especially when this ability is highly developed. We try to examine this question and explain what we mean by saying that Adexa’s supply chain planning solutions are intelligent.

Supply chains have changed since 20 years ago:

  • Complex and large
  • Supply chains are dynamic, changing all the time
  • Each implementation needs to be configured to a business process unique to the client vs. best practices
  • Velocity of business increasing—Real-time Operation is a requirement
  • The line between planning and execution is now becoming more and more blurry
  • Responsiveness Vs Execution which is reliability

Introduction to Adexa Genie©

But none of the above requires “intelligence”.  What Adexa does differently is the ability of the applications to self-improve and self-repair. In other words, the ability to adapt to their environment. Thus as the business changes or conditions change then the application changes with the environment in which it is operating. More specifically, Adexa has the following properties:

  • Organically evolved to work together and to talk to each other-left part knows what the right part is doing
  • Ability to predict the future and to make the right decisions
  • Ability to adapt
  • Ability to learn from its experiences (Artificial Intelligence techniques)
  • Do it fast enough (given time anything is possible)—scalable
  • Distributed agents, know where to look for an answer, see introduction to Adexa Genie©

Thus, our definition of intelligence is to adapt and thrive based on experiences and dynamically change the model of the world around you as it changes so that more optimized decisions are made.

An Adexa Genie© is an independent process that functions as a Digital Expert working in a distributed environment with other Genies. They can communicate and pass information and data to each other as well as communicate with the outside world, machines and humans. They have sensors that can sense or receive relevant changes in their environment and they can act on information they receive in order to optimize certain objective such as cost reduction.

Their performance improves over time because they have the ability to learn and constantly adapt to their environment. For example, an Inventory Genie keeps track of how much inventory is needed and when, depending on factors such as weather, events, holidays and sudden surges in demand. A Cost Genie is responsible to keep track of cost of operations and manufacturing; and how it changes over time and how the product mix is impacting the cost; and what the potential causes are such as rush orders by customers, use of air freight instead of ground and so on.

By observing past behavior of the supply chain, Genies can make predictions for the future and/or alert different people to tell them about an on-going problem that may not be as visible. An example of the latter is that the utilization of certain key equipment may not be as assumed. By monitoring that, they can raise this as a maintenance issue or age of the equipment so that corrective action is taken. Supplier behavior is also a factor in how fast a supply chain may respond. A simple discovery by Supplier Genie could uncover the fact that in winter the delivery performance of certain suppliers drops by 10% and delivery lead-times get longer by almost a week.

It should be noted that Adexa Genies© perform a lot more than monitoring KPIs. They are constantly trying to find causes of issues such as lateness and cost increases as the seasons change, product mix changes and market demand goes up and down. Furthermore, they are capable of recommending actions to be taken such as optimal safety stock, use of right policies for forecasting or focusing on customers which have been subjected to late deliveries lately.

Related Whitepapers

Intelligence is a moving target. How intelligent can systems get? Sky is the limit! Systems can perform math functions much faster than we can, they can beat world chess masters and they can even compose music and movies. This eBook examines what the current state of the art is as applied to #supplychainplanning challenges and how autonomous we can make them.

One way to define intelligence is the ability to predict the outcome of different circumstances and/or construct a scenario to get the desired outcome. If all the situations are pre-defined and outcomes are pre-established then this would require less or no intelligence.

The word “intelligent” is used commonly to indicate how well a software package was designed to respond to different conditions. The more conditions it is programmed to handle, then the more, so is claimed, intelligent is the software package.

1st generation SCP systems were factory planning systems or APS, introduced in mid-80’s followed by supply chain planning as the next generation. More recently the 3rd generation introduced sales and operations in an integrated environment which was later improved to the 4th generation by adding financials into the equation forming the 4th generation of SCP systems.

Now a days I can’t think of any product that is not “smart.” Even clothes you wear can emit signals, your washer knows more about your washing needs than you do, and the thermostat can figure out how to keep you comfortable!

If the next 10 years bears even the same kind of growth and innovation that we have experienced in the past decade, then we are going to be witnessing an incredible era in transformation of supply chains and how the age of real-time connectivity will create virtually instant delivery of what we desire.

One way to define intelligence is the ability to predict the outcome of different circumstances and/or construct a scenario to get the desired outcome. If all the situations are pre-defined and outcomes are pre-established then this would require less or no intelligence.

Learning systems in AI are intended to make software more and more intelligent by learning from its environment. As an example, given a model of supply chain of a company, it must have the capability to constantly improve as the company changes.