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Demand Management Replenishment

Artificial Intelligence and its impact. Not only on business

When driving on an unfamiliar route, what are we guided by: our gut feeling or road signs or GPS indications? Why, then, are as many as 50 percent of business decisions based on intuition rather than hard data?

The BI Survey portal conducted research on a statistically representative sample of several hundred enterprises – from small, through medium-sized, to corporations. The goal was to determine what percentage of business decisions are made based on data versus intuition. The results were puzzling, as it turned out that only 50% of decisions are made based on data!

What do data, business, people and ecology have in common? The answer boils down to the issue of artificial intelligence, which – driven by data – can have a huge impact on business development, employee efficiency and reduction of negative environmental impact. Artificial intelligence is a revolution in these three areas. Each of us must answer the question: do we want to be a participant and beneficiary of it, or just a silent witness and observer?

Artificial intelligence is a revolution for business

The impact of artificial intelligence on business is simple. Only 20% of the data generated inside companies is used for decision-making. That is because the degree of complexity, in other words intricacy, of business no longer “fits” into the much-used Excel. Business has grown in the sense of the multitude of systems and applications and, of course, the data stored in them. On top of that, there is a whole lot of data, seemingly easily accessible, such as historical weather, weather forecast, or any historical data predicted in relation to the economic or geopolitical situation.

With the use of artificial intelligence, the business is able to control all available information – both current and historical, both easy to analyze and confusing. What is most interesting is that this happens beside in a way, because the calculations are performed by an algorithm, not a dedicated employee. The potential of people to deal with creative topics is freed up and everything that is repetitive, foreseeable, detectable and predictable with data – is processed by a computer.

Artificial intelligence is not meant to replace humans

With artificial intelligence, it is possible to predict the future and answer the question of what “tomorrow” will look like. This is what artificial intelligence in general can do. Based on data, of course, and with a certain probability. Probability sufficient to create a foundation for making sensible business decisions that help, improve and support.

However, it should be stipulated right away that artificial intelligence is not intended to replace humans. There is a great example to support this thesis. Each of us sometimes travels by air and we are probably all familiar with the concept of “autopilot”: a plane is controlled without or with limited human intervention. Flights, of course, can be operated without that kind of system – like they used to be in the past. However, they were more difficult, more taxing and more tedious for pilots back then. The “autopilot” replaced the longest (though technically the easiest) part of the flight, allowing pilots to focus on activities that actually require their interference.

This is how we should think about the use of AI in enterprises at the beginning of the  journey, i.e., trying to apply it in tasks that are simple, quantitatively extensive, but repetitive, tedious, perhaps dangerous. Several dozen percent of a business that are needed to run it, but require neither creativity nor specialized knowledge. Taking that chunk away will allow the entrepreneur to focus on those areas that absolutely require human labor.

Artificial intelligence and employees

This is precisely the impact of artificial intelligence on business and, consequently, on people. However, artificial intelligence does not only make it possible to unleash human potential and relieve employees from performing repetitive, tedious tasks that will become automated. Did you know that in companies that do not optimize their supply chains with sales forecasting and where there is a noticeable increase in weekend sales, warehouse workers are most likely to get sick on Fridays? This is true regardless of whether they are rewarded indirectly (team-building events, fruit Thursdays) or directly (money).

This problem can also be solved by artificial intelligence. Warehouse work and its dynamics can be minimized by spreading it evenly over all days of the week, or at least flattening the load diversity curve for each day and thus reducing the negative impact of the dynamics of activities on employees.

The human and technological dimensions are also connected, though not obviously, to ecology, and reducing the negative environmental impact of business can be supported by the use of artificial intelligence algorithms. Warehouse returns, long supply chains, precarious conditions, difficult logistics – these are purely tangible aspects of warehouse operations that have an impact on ecology.

Artificial intelligence helps implement sustainability and zero-emissions

Nowadays, business is fighting for customer attention. This is perfectly evident, for instance, in the fashion industry, where stores offer free delivery, convenient returns, possibility to try clothes on at home and many other amenities that contribute to comfort and improve the customer’s experience, but are not without impact on the environment. Products ordered by customers are repeatedly returned to stores after being tried on at home, and sometimes they circulate this way several times.  AI alone will probably not help reduce this problem, but data analysis and forecasting elements can without doubt significantly improve inventory work and preparation for proper customer service.

Artificial intelligence can help optimize the loading area of vehicles and containers or reduce lead times. Let us not forget that transportation is responsible for more than 60% of greenhouse gas emissions in logistics, and these numbers can drop significantly once AI algorithms are implemented.

It is certain that emissions targets in the coming years will be subject to reporting and verification more often than before. We can therefore hope that this will contribute to more implementations of artificial intelligence, which in many ways can serve to meet environmental goals.

We must look for solutions that will allow us to grow in a sustainable way, i.e. not only environmentally friendly, but also less risky for business continuity. $4 trillion – eleven zeros. That is the value of business assets at risk from climate change by 2030. That is almost four times more than the European Union’s budget for 2021-2027. In addition, it is worrying that climate change is only expected to accelerate in the coming decades….

The business potential that can be unlocked by artificial intelligence lies in data. It is data that contains plenty of information that we can analyze – not only mathematically, but also technologically – in a reasonable time and present results usable for business. Artificial intelligence is no longer an extravagance or futuristic curiosity, but the next stage in development or even a necessity.

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