Why the supply chain should leverage AI in the wake of natural disasters

By Geoff Webb

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In times of natural disasters, AI can be used to proactively anticipate quantities and distribution channels for the supply chain based on fluctuating market factors like commodity supply levels. With the prescriptive, automated insights that machine learning produces, manufacturers can predict the supply and demand, and prepare for volatility in material supply and pricing even before it happens.

With the help of AI, manufacturers can far more easily determine fluctuating material costs. They’re able to analyze the items they manufacture and distribute daily, and understand customer price sensitivity based on location. As a result, they’re able to adjust prices dynamically and rapidly account for real-time shifts in commodity prices. It also enables them to highlight opportunities for price adjustments, trade deals, and other promotions. AI can identify these variables far more rapidly and easily than people are able to, and that enables manufacturers to quickly adjust prices in real-time based on current market factors. AI-enabled dynamic pricing calculates optimal prices based on algorithms that consider varying factors and therefore allows manufacturers to offer flexible pricing that is most likely to appeal to their customers. Full transparency into material availability and pricing in a real-time environment gives manufacturers a competitive edge in a crowded market. For manufacturers dealing with inevitable weather disasters, the ability to execute a pricing strategy at a moment’s notice will go a long way in maintaining a competitive edge and satisfying buyers’ demands for real-time information.

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During natural disasters, brick-and-mortar factories are directly affected. By considering inventory management ahead of a given storm season known for destructive weather patterns, companies can help mitigate disruptions in normal operations before they occur. Using AI-enabled forecasting tools, manufacturers can predict how materials will be impacted by natural disasters and adjust inventory accordingly to prepare.

Even harder to predict can be the impact on transport and logistics during a significant disaster event. Anyone who has seen the pictures of freeways flooded during Hurricane Harvey will know that when a major city is hit, transportation can be massively disrupted, fuel supplies run out, and anything moving through that city can be tied up for days or weeks.

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