Copilot as a supply chain management solution
The last few years have been anything but easy for the manufacturing sector. For example, companies are faced with the task of making their production and supply chains more flexible, resilient, and efficient. However, with rapid advances in artificial intelligence (AI) and its integration into ERP systems, new solutions to these challenges are emerging.
Microsoft recently took an important step by making Copilot AI an integral part of all Microsoft Dynamics 365 business applications, including supply chain management. This comprehensive integration enables the seamless use of AI in everyday business processes. The specific application possibilities for the manufacturing industry offer completely new approaches.
In this article, we will shed light on how Copilot is designed specifically for the challenges associated with supply chains in the manufacturing sector. In another article, we look at how Copilot simplifies and automates complex business planning in manufacturing.
Challenges in manufacturing and supply chains: an overview
Predictive and resilient supply chains are key in uncertain times. A study conducted by The Manufacturer in collaboration with HSO in 2023 shows that 53% of the companies surveyed are significantly or severely affected when sourcing raw materials and components from suppliers. In previous years, the situation was even more critical.
To counter these risks, manufacturing companies are increasingly relying on process automation, data-driven decision-making, data analytics, and improved planning and scheduling. And this is precisely where Copilot's strengths lie.
The following challenges increase the pressure on supply chain management:
A global pandemic and its effects:
COVID-19 led to massive disruptions in supply chains, factory closures and fluctuations in demand.
Shortage of raw materials and price fluctuations:
The rising prices and scarcity of raw materials affected both production costs and availability.
Geopolitical tensions and trade conflicts:
Trade wars and geopolitical instability caused uncertainty and disruption in global supply chains.
There is growing pressure to introduce sustainable practices and reduce CO2 emissions.
Increasing customer requirements:
Expectations of product quality, individualization and delivery times are increasing.
Understanding the change Copilot and generative AI deliver:
Artificial intelligence is particularly good at reducing complexity, gaining insights from large amounts of data, and automating routine tasks. This creates space for strategic planning, personal collaboration, and creative problem-solving - tasks that should still be performed by human experts.
The integration of Copilot into all Microsoft Dynamics 365 business applications changes two important things for companies:
- Interaction with AI software is now possible through natural language (Natural Language Interfaces).
- A powerful reasoning engine synthesizes large amounts of data, enabling generative and predictive insights that build directly on your data.
Copilot is accessible via no-code and low-code applications, allowing users of any technical skill level to utilize AI-powered features. With Copilot Studio, a low-code tool from Microsoft, companies can personalize Copilot alongside the "out of the box" solutions for Microsoft 365 and Microsoft Dynamics 365 Business Applications and create their Copilots for specific business scenarios.
Copilot provides up-to-date data and forecasts to enable rapid adjustments in production and supply chain management in the event of unforeseen market changes.
For example, suppose an air conditioning manufacturer realizes that a heat wave is coming earlier than expected. Copilot could provide real-time weather data and sales trends that allow the company to increase the production of air conditioners and quickly replenish inventory in affected regions to meet rising demand.
By integrating market and supplier data, Copilot helps to develop efficient procurement strategies and identify alternative sources of supply - crucial in the event of raw material shortages and price fluctuations.
For example, if a glass manufacturer is suddenly faced with a shortage of rare earths, artificial intelligence could quickly suggest alternative material compositions that make use of available resources by analyzing market data. At the same time, Copliot can be used to establish contact with alternative suppliers.
Meeting increasing customer demands
Copilot improves production planning and customer relationship management through advanced data analytics to increase customer satisfaction through higher product quality and faster delivery times.
Copilot analyzes global trends and news data to help companies assess risk and minimize disruption in global supply chains.
For example, if a car manufacturer sources key parts from a region under threat of international sanctions, Copilot could assess the risk by analyzing news and other external sources. At the same time, AI makes it easier to take preventative measures, such as searching for alternative sources or adjusting product lines.
Sustainability through process optimization
Although Copilot does not directly target sustainability initiatives, it indirectly contributes to environmental goals by optimizing supply chains and reducing waste. AI also helps to identify and analyze the appropriate reporting data.
Let's say a furniture manufacturer wants to reduce the waste of wood and other materials. Copilot can help analyze historical production data to identify patterns in material consumption.
Copilot in Dynamics 365 at GSF
Let's say a manufacturer of household appliances is faced with rising expectations regarding product customization. Copilot could help analyze real-time data from customer feedback and market trends.
Carol Fawcett, Corporate Vice President and Chief Information Officer at GSF, summarizes the situation succinctly:
"The fact is that our business requirements haven't just changed in the last two years - they've been turned upside down overnight... Fortunately, with Dynamics 365, we have a flexible solution that can grow and adapt with us."
Copilot in Manufacturing & Supply Chain
Knowledge and insights around Copilot and Manufacturing