The AI hype machine is in full swing, but don’t let marketing fatigue get in the way of understanding the profound change that is taking place in the logistics industry.
If there’s one thing that tech marketers are really good at, it’s pivoting and jumping on the latest tech hype bandwagon. Just walk down the aisle of any industry trade show and it’s impossible to miss “AI” plastered front and center on every booth. The same is true on tech websites and advertising campaigns.
For those who are responsible for evaluating and purchasing IT products and services, it’s easy to understand how this drives frustration and eye rolling. The marketing spin is so over the top, it’s difficult to determine where the hype versus reality line really sits.
Buyers are asking all kinds of questions, such as:
I recently heard a story from a former colleague, who was talking to innovation executives at a very large pharmaceutical company, and they said “Everyone here is talking about AI, but nobody is doing anything with it.”
However, what’s taking place right now with AI is not another blockchain moment. AI is a major technology inflection point – at the level of the personal computer, the internet, social networks and the smartphone. The nomenclature could well evolve, but the reality is that software has matured to a point where it can think and learn by itself and that’s not going away.
Over 25 years ago, the business tech world was on fire, trying to understand a new kind of software that ran on the world wide web. The concept was simple. Instead of buying software on a disc and installing and configuring it on dedicated servers, companies could just rent the capabilities as a pay-as-you-go service and use it with a web browser.
By using business software on the internet, companies did not need to take on the up-front risk of buying and owning something that would rapidly become obsolete as technology matured. It was a huge threat to the very existence of big incumbent software companies because the burden of success shifted from the buyers to the sellers.
The marketing hype was at the same level we’re setting today with AI. The dot com boom drove enormous sums of money into start-ups of all types, who then took that money and invested it in trade shows, billboards, and super bowl TV commercials.
The promises were over the top and buyers were confused. The handle of internet software also evolved over many years. It included terms such as “on-demand” to “ASP” to “hosted” but eventually settled on “Cloud”. Thanks largely to Marc Benioff and the success of Salesforce, companies began to understand that the cloud was a good thing, it was real, and the time had come to shut down private data centers and go online for business software.
In 2009, Oracle’s Lary Ellison famously mocked the “the cloud” as a ridiculous hyped-up concept, yet today Oracle is very much a Cloud company ahead of anything else. Today, it’s rare to find any software company selling a product that is not delivered in the cloud. Oracle is now ALL IN on cloud, by the way.
In the supply chain arena, Cloud actually became a very important innovation because it began to break down the IT silos that plagued the industry. While traditional software was good at supply chain and transportation planning, the executional dimension was a constant struggle because so much of the data required to orchestrate the movement of goods around the world came from partners, who each had their own systems and processes.
As cloud eventually morphed to include business networks, the ability to exchange data began to improve. Enterprises invested in cloud solutions to automate transportation, warehousing, order management, visibility, procurement, and trade finance. Cloud helped eliminate faxing and phone calls, however partners were still forced to build EDI connections or log onto web portals to interact with their customers in order to realize the full benefits of automation.
Fast forward a decade and we’re in the next phase of logistics innovation with AI at the center of the value proposition. There are countless solid use cases emerging from the ecosystem of new companies, each addressing a specific piece of the supply chain puzzle. But the big opportunity is pointing AI at the information networks – the data that fuels the cloud software that has already been deployed.
Not too long ago, if a large company implemented an advanced, cloud-based logistics operating platform, they had to go out to the partners they work with to get them to connect in some way so that digitized updates and documents could feed into the software tools. Even the biggest enterprises on the planet struggled with this. The result? A nonstop environment of missing, late, or incomplete data which often led to expensive disruptions and mistakes.
Today, AI is a new layer of information processing that blends high scale parsing of emails, PDFs, EDI, spreadsheet and even image with data command center, which gives human teams the ability to intervene and correct gaps. The blend of high-volume transactions and smart, human influenced tweaks trains the AI to a point where it will achieve the level of high precision that’s so desperately needed in supply chain management. Importantly, AI allows companies to engage with partners, without requiring all of them to do it the same way.
For example, Raft.ai is doing this now, processing more than $10 Billion in logistics invoices each year, across a network of thousands of different partners. The invoices are all in different formats and constantly changing.
What was once one of the most mundane human jobs that nobody wants to do - scouring inboxes and rekeying data - is now handled by a machine that gets smarter with every invoice processed. This is something that’s not going away.
So let the hype continue.
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