KPMG combine AI and big data to uncork supply bottlenecks

Artificial intelligence and big data are being unleashed across Australian businesses to combat predicted shortages in the lead-up to Christmas.

The use of AI enabled a real-time analysis of myriad data points that human-based systems could not absorb.

Artificial intelligence and big data are being unleashed across Australian businesses to combat predicted shortages of groceries and other products in the lead-up to Christmas and help sidestep trade disruptions from an increasingly hostile China.

KPMG has unveiled a platform it calls a “powered supply chain with predictive modelling capability” that uses AI and big data to pinpoint bottlenecks in supply chains and allocate resources and inventory to where they are needed most. It comes a day after Woolworths chief executive Brad Banducci warned the Victorian government that the state could run out of some food staples for Christmas if onerous coronavirus-fuelled restrictions on workplaces, warehouses and distribution centres are maintained.

KPMG’s partner in charge of Asia-Pacific supply chain advisory, Peter Liddell, said COVID-19 had up-ended normal supply-and-demand modelling and greater visibility of “choke points” was needed to combat shortages of high-demand goods.

Mr Liddell said the use of AI enabled a real-time analysis of myriad data points that human-based systems could not absorb, which helped clear bottlenecks in supply chains by enabling businesses to predict disruptions and changes in consumer behaviour.

The COVID-19 pandemic and the devastating bushfires over summer had accelerated the use of such technology as supply chains came under unprecedented pressure from social distancing measures, product shortages and panic buying.

Mr Liddell said that underlined the importance of businesses being able to respond more quickly to potential disruptions, particularly in the lead-up to the busy Christmas period, which the nation’s supermarkets were expecting to be their biggest ever, forecasting COVID-19 restrictions to lift turnover by 20-30 per cent.

“With the limitation of airfreight and imports we have already seen the reduction of national stockpiles. We are interacting with a lot of different industry players who are concerned that as demand surges into Christmas there could be shortages,” Mr Liddell said.

“In agribusiness, we are seeing a lot of people in the sector using real-time information and having far more responsive planning capabilities. You can’t stop bushfires from stopping a route but you can use that information to know that it’s happening and thereby start planning changes to work around it so as not to lose your customer fulfilment and deliveries.

“Big players, the food processors and distributors and agribusiness can use this predictive capability to sense changes in advance and use that in real time to respond and work product through their networks.”

KPMG Australia national sector leader for consumer and retail, Robert Poole.

Mr Liddell said that as well as helping ease bottlenecks, the technology could be used to mitigate disruption from geopolitical tensions, such as the current trade stoush between Beijing and Canberra.

“In wine and meat products where you have real premium value, when you start to sense geopolitical challenges and you know on one side some of the market will be slowed down, but on another side we are seeing some Southeast Asian countries where there is affluence and growth happening start to open up.

“So getting signals at both ends — with one market slowing but other markets opening up — you can start to re-pivot and reposition your premium products into those markets where people are ready to buy. Using that real-time information, rather than get a monthly report, you can get a competitive advantage over others.”

While Mr Liddell described the platform as a cost-effective solution to combating supply chain disruptions, he did not underestimate the scale of the challenge COVID-19 imposed.

KPMG Australia national sector leader for consumer and retail, Robert Poole likened the response to the Y2K bug 21 years ago.

“It’s an extraordinary time in that every company is affected.

“There is not a single company, as far as I can tell, that can sit there and do exactly the same thing they did yesterday.

“Every single company has to take some sort of action,” Mr Poole said.

“The only example that is even remotely similar is Y2K … But this is Y2K times a million.”