As a factory manager, what is it that you dread the most about your job?
Perhaps your heart skips a beat at the thought of an accident at the workplace. Injury to staff and damage to important machinery can be tough to take.
Maybe it’s news like you’ve run out of stock and have to turn away clients that give you the frights.
Your worker wage bill may also be keeping you up at night. Something needs to be done to keep in check the spending, but you just can’t quite figure out where to trim the hedges.
You’ll find some solutions in the applications of artificial intelligence in manufacturing in 2021. Artificial intelligence tools can increase workplace safety, help you manage your inventory better, and reduce costs by taking over recurring tasks and reducing manpower, among other benefits.
Let’s get started and find out how you too can tap into the advantages of AI in manufacturing:
1. Demand Prediction
Without proper demand forecasting or prediction, you’ll have to grope in the dark about the customer metrics you need to meet. Consequently, you wouldn’t know how much raw materials you’ll need exactly.
Over and underquoting raw materials means extra, and, costly sourcing trips than necessary, or over purchases with funds that would have been better served elsewhere.
Crucially, poor demand predictions also lead to over and undersupply situations.
Both are really bad. Undersupplying destroys customer confidence, first of all. Then, it allows competitors to swoop in and save the day, filling the gap and winning over your hard-earned clients.
An oversupply, on the other hand, inflates inventory costs.
You also probably rely on exponential smoothing, or other traditional forecasting methods, which aren’t as accurate as modern AI-forecasting tools can be.
AI forecasting lowers miscalculations by up to 50%, a McKinsey Study reveals.
Via intelligent software, you can get a better picture of the market. These tools can work with the trends to predict future market performances of your products, hence you can adjust production to anticipate these market needs. Surges and drops won’t hit you in the face like an unnoticed door.
Some AI demand prediction tools manufacturers are using right now include:
- Smart Demand Planner
- ClosePlan
- COLIBRI
- Capsule
But there’s many more, of course.
Walmart, for example, uses predictive analytics and AI to predict demand. Point-of-sale systems, and other points of research, offer important data that feeds the AI system which then predicts user behaviour buying patterns. Online sales have gone up by 63% and that’s largely because of this.
2. Supply Chain Management
As a factor manager, you probably have tons of workers taking care of everyday shipping.
You have people for packing, transportation, and other supply chain duties. It’s all complicated and VERY expensive to run. Probably, accidents happen now and again.
Machine operators make mistakes and products get damaged or destroyed, resulting in losses and customer dissatisfaction.
Smart warehouses are currently one of the trending applications of AI and are perfecting repetitive chores and reducing accidents.
What has long been elusive as hearsay is now a reality. An AI brain can intelligently automate some of the processes that have previously been handled by human operators.
Automated guided vehicles, simply AGVs, for example, are now effectively handling chores such as transporting and handling goods or materials.
An AGV is a self-driving vehicle guided by an AI underlying.
It eliminates human handlers, thus reducing recurring expenditure. The AGV can maneuver around the warehouse in a much safer manner compared to human-driven alternatives.
But that’s not all they bring to the table.
More importantly, the AGV offers better productivity rates than human workers. They not only work faster but also more efficiently. Save for maintenance, there are no downtimes in output.
Artificial intelligence has also enabled automated warehouse picking systems.
These systems entail rack structures, stock-keeping units, and packing technologies. They can be fused seamlessly into prevailing infrastructure, and offer cost-cutting and output advantages as well.
Amazon is already reaping the benefits of machine learning for packaging in 2021. The company has reduced shipping materials needed for packing through AI software. Hence, transportation and other associated costs, namely taxes, etc. have gone down.
Autonomous drones are also taking over delivery duties too.
The company has saved thousands of tonnages of unnecessary transportation and manpower, helping profit margins soar like never before.
3. Inventory Management
You probably struggle a lot to find the right balance in terms of stock, or maybe your store manager does.
Too much in the warehouse means worrying about additional storage costs, as well as an increased risk of damage and theft. The excess, non-moving stock also holds ransom your company’s resources.
The absence of a single item, on the flip side, can bring production to halt.
For instance, Elon Musk once admitted in an interview that a shortage of USB cables stopped production for the Model S. They had to raid nearby electronics shops to get things started again.
Inventory management is a fast-paced affair that can get messy!
Implementing an AI system as part of your inventory management tactics is an excellent way to avoid inventory pitfalls and transform your business. Of course, some human oversight is always necessary, but your inventory is going to be all the better for it.
Better organization, better planning, fewer mistakes, and MORE rewards!
AI systems through reinforcement learning can satisfactorily take over inventory management in its entirety. Reinforcement learning is a component of machine learning that entails the AI model making a prediction and acting on it.
The corrective action is typically guided within a certain window, defined by a reward-or-punish concept that governs the algorithm.
Hence, the system doesn’t stock too high or too low.
Alibaba, the largest e-commerce platform on the planet, is getting aid from artificial intelligence to plan out its inventory. An AI-fueled algorithm, namely Tmall Smart Selection, recommends inventory changes according to the demand for a product.
It examines customer behaviour constantly, powered by natural language and machine learning. If a product sees an upward purchase trend, the AI program increase invoice requirements to get ahead of the shortage.
Conclusion
Would your company benefit from any of these AI applications in manufacturing in 2021 that we’ve discussed today?
Gone are the days when inventory management entailed hours of head-scratching, long nights of pondering, and plenty of costly mistakes. Incorporating artificial intelligence into your inventory software can ensure your inventory hits the mark and your demand predictions are right on the money.
AI tools will also reduce the number of human personnel necessary, hence free up your budget for other needs or simply ease the financial load. They will also do a better job of keeping workers, equipment, and goods safer.
Implement AI solutions in your factory, and witness how easy a manager’s job gets!