How artificial intelligence is making supply chains fit for the future

Ever since the ChatGPT hype, everyone has been talking about artificial intelligence. What was considered science fiction not too long ago has already become an integral part of our everyday lives. Whether it involves algorithmic recommendations from streaming services, personalized advertising, or the utilization of voice assistants and smart home applications, AI has permeated various aspects of our existence. Moreover, the integration of trends like machine learning and data science extends beyond the private domain; industries have long recognized the advantages of automated process chains. This is also the case with thyssenkrupp Material ServicesAs one of the largest plant-independent materials traders and service providers in the world, the company supports its customers in data-based supply chain optimization with its specially developed AI solution pacemaker.ai.

TThe intelligent software is now backed by a team of over 60 people. The AI technologies currently on offer include Demand Forecasting and Product Carbon Intelligence. "With Demand Forecasting, we provide our customers with precise sales forecasts that enable them to generate better planning figures, reduce unnecessary stock levels, and thus make significant cost savings," explains Christian Jabs, Managing Director at pacemaker.ai. "Product Carbon Intelligence determines the individual carbon footprint of a product by analyzing complex data sets. This can then be used as a basis for making informed decisions on the implementation of sustainability strategies." And with success! pacemaker.ai is in use worldwide and has become an integral part of thyssenkrupp's digitalization strategy.

The pacemaker.ai team works passionately every day to help companies optimize their supply chains using AI-based demand forecasting and product carbon intelligence solutions - from demand forecasting to data-driven decisions.

Complexity is the key factor here. Supply chains have become significantly more challenging to predict due to external variables such as wars, pandemics, and natural disasters. Traditional planning methods, often simple correlations based on Excel, are now reaching their limits and failing to provide accurate results and forecasts. This is where artificial intelligence can leverage its strengths. " With the help of machine learning technology, we find patterns in the past, expand them to include relevant influencing factors and project them into the future. The combination of internal company figures and external data, such as the oil price, weather data, and exchange rates, enables us to make reliable forecasts with an incredibly high accuracy. Based on these calculations, our customers receive 20-30% better forecasts, which they can then use to align the management of their company. Our customers in the industry can then use these forecasts to manage their company," explains the expert.

Minimized effort. Maximized efficiency.

But what exactly does it take to forecast how many products will be sold in 18 months? Less than potential customers often assume, according to Christian Jabs. They are often pleasantly surprised by the minimal requirements that artificial intelligence needs to optimize the supply chain. “It is enough to export a small number of data series from the customer's ERP system - be it SAP or even Excel. With just three columns (date, product name and product quantity), our demand forecasting tool can provide valuable initial insights that enable more efficient inventory planning”, explains Jabs.

Christian Jabs works in Sustainability & Supply Chain Management at pacemaker.ai, the AI subsidiary of thyssenkrupp Materials Services.

In addition to efficient inventory management, personnel planning also plays a crucial role when it comes to reducing costs. Reliable AI-technology forecasts mean that order peaks can be planned well in advance and skilled workers do not have to be ordered at short notice and therefore more expensively than necessary, explains the expert. The benefits of artificial intelligence are evident. Nevertheless, many potential customers are still hesitant due to the above-mentioned, yet unjustified, skepticism towards the new technology. Change management is the key to success here and is one of the daily tasks of the entire pacemaker.ai team.

State of artificial intelligence

Jabs and his team can already reliably predict several things with the help of artificial intelligence. However, the development of the technology in the coming years primarily depends on external factors such as legislation and regulation. Jabs is optimistic about the future: "Technology was, is and always will be Germany's most important resource." The challenges of the green transformation of the industry are also closely linked to the development of innovative solutions such as pacemaker's Product Carbon Intelligence.

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thyssenkrupp's own company pacemaker® combines artificial intelligence, technology and people for data-based decisions - enabling more efficient and sustainable supply chains.

That is why the pacemaker.ai team has set itself ambitious goals. "In the long term, we want to become the global market leader for industrial AI applications. The basis for this is the combination of cutting-edge technology and industrial experience, and I personally firmly believe that we are already on the right path to achieving this goal."

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