AI Shapes Analytics for Complex, Expanding Supply Chains -- ISG

Many companies with complex supply chains are co-developing specialized analytics systems with providers that allow them to adapt quickly to dynamic market conditions, according to a new research report published today by Information Services Group ( ISG ) (Nasdaq: III ), a leading global technology research and advisory firm.

The 2024 ISG Provider Lens™ global Specialty Analytics Services report for the supply chain industry finds that organizations are investing in technologies to harness enterprise and ecosystem data for better decision-making. The COVID-19 pandemic exposed the fragility of global supply chains, so enterprises are exploring how data and analytics can make systems more resilient and sustainable.

“Companies can no longer take supply chains for granted,” said Bob Krohn, partner, manufacturing, for ISG. “By implementing new technologies with providers, they are achieving the end-to-end visibility they need to stay ahead of changes.”

Enterprises can solve many supply-chain problems with advanced analytics based on a solid data foundation, the report says. Once companies have integrated internal and external data and removed errors, analytics platforms become powerful decision-support systems that can generate suggestions for optimizing operations. They can also help companies calculate risks and plan how to manage potential disruptions.

AI is often at the center of these solutions, and providers and enterprises are beginning to apply generative AI (GenAI) to many use cases, ISG says. In integrated supply chain command centers, GenAI may improve demand forecasting, capacity planning and order tracking. Combined with computer vision and IoT, GenAI may allow companies to introduce automation throughout the supply chain, making the best use of limited staff.

With more specialized analytics tools, enterprises have found new use cases, the report says. Integrated data allows them to evaluate specific suppliers to ensure supply chain continuity. Digital twins that simulate physical assets and processes are helping companies predict outcomes and make better decisions. Improved analytics systems streamline distribution, enabling on-time order fulfillment. They also support compliance with ESG reporting rules that require understanding the whole supply chain.

Companies seeking specialized analytics providers commonly look for a track record of quickly delivering business value, ISG says. They often choose providers that employ reusable components, called accelerators, that reflect expertise in the client’s industry. Enterprises get the most out of custom analytics platforms when they own the intellectual property developed in conjunction with the provider.

“Off-the-shelf analytics platforms can solve some common problems, but oversight and control of a complex supply chain requires a custom solution,” said Jan Erik Aase, partner and global leader, ISG Provider Lens Research. “Leading providers collaborate with clients to build systems that can evolve and deliver results over time.”

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