Machine Learning And Artificial Intelligence In Demand Planning

While machine learning and artificial intelligence (AI) have been used in supply chain applications for some time, there is an ongoing arms race to more effectively leverage both machine learning and artificial intelligence in demand planning solutions in new ways. Demand planning is one of the key applications in supply chain planning (SCP) suites. In ARC's recent global market study on this market, demand applications account for just under a third of a $2 billion plus market. And these applications are often the wedge purchase; the SCP solution that is first implemented by a company that then goes on to purchase other solutions in the suite. Machine learning works by taking the output of an application (for example, a forecast), examining that output against some measure of the truth, and then adjusting the parameters or math involved in generating the output (forecast), and seeing if the adjustments lead to more accurate outputs.