demand plan
Large Language Models for Supply Chain Decisions
Simchi-Levi, David, Mellou, Konstantina, Menache, Ishai, Pathuri, Jeevan
Supply Chain Management requires addressing a variety of complex decision-making challenges, from sourcing strategies to planning and execution. Over the last few decades, advances in computation and information technologies have enabled the transition from manual, intuition and experience-based decision-making, into more automated and data-driven decisions using a variety of tools that apply optimization techniques. These techniques use mathematical methods to improve decision-making. Unfortunately, business planners and executives still need to spend considerable time and effort to (i) understand and explain the recommendations coming out of these technologies; (ii) analyze various scenarios and answer what-if questions; and (iii) update the mathematical models used in these tools to reflect current business environments. Addressing these challenges requires involving data science teams and/or the technology providers to explain results or make the necessary changes in the technology and hence significantly slows down decision making. Motivated by the recent advances in Large Language Models (LLMs), we report how this disruptive technology can democratize supply chain technology - namely, facilitate the understanding of tools' outcomes, as well as the interaction with supply chain tools without human-in-the-loop. Specifically, we report how we apply LLMs to address the three challenges described above, thus substantially reducing the time to decision from days and weeks to minutes and hours as well as dramatically increasing planners' and executives' productivity and impact.
Predicting Bad Goods Risk Scores with ARIMA Time Series: A Novel Risk Assessment Approach
--The increasing complexity of supply chains and the rising costs associated with defective or substandard goods ("bad goods") highlight the urgent need for advanced predictive methodologies to mitigate risks and enhance operational efficiency. This research presents a novel framework that integrates Time Series ARIMA (AutoRegressive Integrated Moving A ver-age) models with a proprietary formula specifically designed to calculate bad goods after time series forecasting. ARIMA is employed to capture temporal trends in time series data, while the newly developed formula quantifies the likelihood and impact of defects with greater precision. Experimental results, validated on a dataset spanning 2022-2024 for Organic Beer-G 1 Liter, demonstrate that the proposed method outperforms traditional statistical models, such as Exponential Smoothing and Holt-Winters, in both prediction accuracy and risk evaluation. I. INTRODUCTION In modern industrial systems, detecting and preventing defective or substandard products--termed "bad goods"--such as manufacturing flaws or spoiled items like Organic Beer-G 1 Liter, remains a critical challenge. These defects result in financial losses, reputational harm, and supply chain inefficiencies. Traditional approaches like statistical process control and manual inspections struggle to address the complexity of large-scale operations [1]. The advent of big data and advanced analytics has elevated predictive methods as a key strategy for preempting such risks [2].
Is demand planning ready for AI? – Technology – CSCMP's Supply Chain Quarterly
Artificial intelligence (AI) continues to draw a lot of attention as companies and technology vendors look at how machine learning could improve supply chain operations. In particular demand planning, understood here as the process of developing forecasts that will drive operational supply chain decisions, is being touted as the next potential field for innovation. Technology giants like Amazon and Microsoft have announced AI tools for improving demand planning, and several consulting companies are promoting their skills to bring AI to companies' demand planning processes. In fact, a recent survey by the Institute of Business Forecasting and Planning (IBF) identified AI as the technology that will have the largest impact on demand planning in the next seven years.1 It's not hard to see the fit between AI and demand planning. Demand planning involves lots of number crunching and data analytics, and it is repeated cycle after cycle.