Why trust is key for artificial intelligence adoption in the consumer goods supply chain

October 7, 2017
Industry News
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Eric Ng

Despite a promising future, adoption of artificial intelligence (AI) in consumer goods manufacturing and supply chain management has been much slower than in the technology, retailing and financial services sectors due to a lack of data for analytic tools to work on, according to a supply chain expert.
 

“AI is about the collection and analysis of data and the application of insights gained. So far the most successful applications of AI are in facial and voice recognition, cartoon animation, medical diagnostics and automatic navigation,” Hau Lee, chairman of the board of Fung Academy, said in an interview.

The academy is a business unit under Fung Group focusing on staff training on technology adoption, as well as fostering innovation and new technology applications across the group’s businesses.

Lee is also a professor of operations, information and technology at the Stanford Graduate School of Business, and had co-founded several supply chain and price optimisation software firms in the United States.

Lee noted that the application of AI in supply chain management has been slower than in other industries because industry participants are reluctant to share their operating data.

“What’s more, each participant only has access to data limited by the products they make, the geographical markets they serve, in a confined section of a long supply chain,” he said.

Even so, Lee said data analytics has big potential in supply chain management since “even a 1 per cent cost saving in business-to-business dealings can amount of hundreds of millions of dollars”.

Even in the broader business world, adoption of AI is only at an experimental stage, according to a McKinsey survey of 3,000 executives in 10 nations across 14 industries.Continue Reading

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