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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 Services. As 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®.
The intelligent software is now backed by a team of over 40 people. Dr. Reiner Kurzhals is one of the experts. He has been working as Chief Product Officer at pacemaker® since December 2022. In this role, he is responsible for the strategic development of the products. 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 Kurzhals. "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! The team has already been able to make some of its customers' processes more cost-efficient - the use of pacemaker has thus become an integral part of thyssenkrupp's digitalization strategy.
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. "Using state-of-the-art technology, we look at billions of patterns from the past 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 of more than 90% in most cases. Our customers in the industry can then use these forecasts to manage their company," explains the expert.
Minimized effort. Maximized efficiency.
But what exactly is required to predict the number of products that will be sold in 18 months? Not as much as potential customers initially assume, according to Dr. Reiner Kurzhals. They are often pleasantly surprised by the minimal requirements that artificial intelligence needs to optimize the supply chain."It is sufficient to export very few data time series from the customer's ERP (Enterprise Resource Planning), such as SAP or Excel. With just three columns (date, product name and product quantity), our Demand Forecasting product can gain insights that can be used to plan stock levels more efficiently," explains Kurzhals.
Dr. Reiner Kurzhals has been working as Chief Product Officer at pacemaker® - a subsidiary of thyssenkrupp Materials Services - since December 2022. In this role, he is responsible for the strategic development of innovative software solutions based on artificial intelligence.
In addition to efficient inventory management, personnel planning also plays a crucial role when it comes to reducing costs. Reliable AI 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® team.
State of artificial intelligence
Kurzhals 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.Kurzhals 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.
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® 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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