The ongoing artificial intelligence boom has already had a profound impact on supply chain management around the world, but its wider impact appears to be fostering more symbiotic relationships between brands and their vendors in a way that’s unlocking new opportunities.
The adoption of automation tools throughout the supply chain is rapidly accelerating. According to a recent NTT Data report based on insights from over 500 manufacturing leaders throughout 34 countries, 95% of respondents claimed that generative AI is already directly improving efficiency and bottom-line performance.
The report found that supply chain and inventory management are the leading use cases when it comes to using artificial intelligence, but how are automation tools reshaping brand relationships with vendors at scale?
Generative AI’s power to automate repetitive tasks while compiling cutting-edge insights into supply chain networks that can often seem opaque when observed through more analogue methods can be a strong asset for decision-makers. These tools are improving brand relationships by enhancing channels for communication and transparency, boosting operational efficiency, and supporting decisions with the use of data.
With this in mind, let’s take a closer look at the quality of insights that automation tools are providing to support relationships between brands and their vendors:
1. Streamlined Communication
Good communication can open more doors for brands when it comes to supply chain management, and positive vendor relationships may mean more expedited orders, bulk discounts, and even allocated inventory space when paying in advance for goods.
Manual communication processes can be a threat to this efficiency, potentially leading to more confusion and misunderstanding among both parties and damaging the relationship.
Workflow automation can effectively counter this, and intelligent processes eliminate the need for troublesome back-and-forth communication, instead creating a centralized platform for everybody to stay up to date with. Here, all the essential documents, updates, compliance information, and necessary feedback can be shared and tracked with little in the way of disruption.
Automated notifications and alerts can also keep everyone up-to-date with deadline changes, necessary actions, or other urgent information that needs to be shared efficiently. This means that everyone can stay on the same page without the risk of miscommunication.
2. Performance Monitoring
Other key relationship risks between brands and vendors can emerge when the performance of one party comes into question. Autonomous performance monitoring tools can effectively counter this, compiling real-time insights into easy-to-understand reports that focus on clear and objective truths.
Unclear performance monitoring software can result in sporadic and subjective insights into a process that’s constantly moving, and the use of intelligent automation tools can make all the difference in converting key performance data based on delivery rates, defect rates, fill rates, and other essential metrics for a holistic overview of how each vendor works.
To further improve vendor relationships through automation, automation technology can action swift payouts to vendors based on the successful completion of certain criteria, such as receiving orders and passing quality control.
3. Demand Forecasting
Vendor relationships can become strained when brand decision-makers don’t know how much inventory to order, causing communication to become more indecisive and orders to become more protracted.
AI algorithms can help this by tapping into machine learning (ML) to analyze vast historical datasets and market trends to anticipate demand, forming a predictive model for making proactive inventory adjustments to match expected sales while minimizing waste.
This, coupled with Internet of Things (IoT) inventory tracking tools, means that automation technology can assist in managing stock in a more hands-on way, helping to detect anomalies or instances of theft.
Once again, this maintains an essential level of transparency between all parties that can help to streamline the ordering process and maintain a high level of trust as more inventory arrives.
4. Fixing Manual Errors
Misunderstandings have ruined many working relationships in the past, and they’re sure to ruin more in the future. But with automation tools, more brands have access to reliable information that’s free of human errors that could lead to invoice discrepancies and delays.
Whether an invoice typo causes a disagreement or a delivery is miscategorized, automation helps to eliminate these kinds of manual errors by ensuring accurate data exchange with vendors in a way that prevents costly disputes and supply chain disruption.
5. Data Management
Automation as a time-saving tool can’t be underestimated. More workers can make mistakes when under pressure, and these misguided measures can lead to visibility issues and a lack of clarity.
By offloading some decisions to automation tools, more brands can maintain a consistent level of logic in specific scenarios, helping vendors to become more accustomed to certain essential processes.
This can also help reduce the time spent on low-level tasks that can be more tiring for workers, who may experience poor communication skills with vendors as a result of burnout.
Automation can also route the right data to the necessary workers at the best possible time. For instance, if a last-mile delivery driver is running late, AI tools can alert dispatchers to find an alternative nearby driver to finish the route.
Embracing Automation
By leveraging automation, brands are able to create more efficient, transparent, and responsive relationships with vendors, which could lead to far greater levels of efficiency when it comes to accessing better deals and even utilizing their warehouse space for stock.
Most importantly, automation tools can build a lasting relationship with vendors that can help to prevent any unwanted surprises throughout the supply chain. In creating more meaningful avenues for communication, it’s possible to develop a level of resilience that helps your brand to continue thriving, no matter what comes next for customer demand.
By leveraging automation, brands can create more efficient, transparent, and responsive relationships with their vendors, which forms the foundation for long-term collaboration and mutual growth.
