Unmasking the Illusions
Over the years, supply chain systems have failed to deliver on their promises of waste elimination, profit maximization, and resilience. The legacy Advanced Planning Systems (APS) vendors, who once touted their solutions as the ultimate answer to supply chain challenges, are struggling to keep up with the artificial intelligence (AI) revolution. They have hastily jumped on the AI bandwagon, claiming that their features will usher in a new era of supply chain planning. But have they truly harnessed the power of AI to maximize profits through automated decision-making?
At Noodle.ai, we have developed a supply chain planning “system of intelligence” that leverages AI and machine learning from the ground up. Unlike legacy APS vendors burdened with deterministic and fixed logic, our products are built to overcome the waste and lost sales that have plagued supply chains in recent years. However, amidst the proliferation of AI claims on websites and marketing materials, it is important to understand how Noodle.ai differentiates itself from the legacy vendors in terms of probabilistic planning:
- Demand and supply prediction: Legacy vendors often boast about accumulating new algorithms for statistical modeling, believing that more models equate to better outcomes. Noodle.ai takes a different approach. We believe that AI can enhance the planning process beyond statistical forecasting. Our product utilizes AI to answer complex questions, such as identifying reliable internal and external signals for each lag, reconciling insights at different hierarchical levels, and uncovering correlations in the data to inform the right disaggregation logic. Moreover, Noodle.ai extends the use of AI to supply prediction, acknowledging that lead times, production yields, and other parameters are inherently probabilistic. By incorporating these capabilities, our system enables faster anticipation of demand-supply imbalances, empowering planners to strategically protect margins rather than constantly firefighting.
- Value-at-risk: While legacy vendors talk about “optimization,” their supply planning solutions typically focus solely on volume-based metrics, providing limited visibility into the value impact of demand-supply imbalances. At Noodle.ai, we use AI to predict demand and supply and then calculate the business impact, value-at-risk, on both the top and bottom line. We convert probabilities into human-readable financial values, enabling planners to make quick and informed business decisions. What sets us apart is our flexibility in defining value, allowing different business strategies to be prioritized, whether it’s emphasizing service or cost efficiency. By highlighting exceptions with the greatest financial impact, value-at-risk lets planners focus their efforts where they matter most.
- Corrective actions: Legacy vendors often mention “automated decisioning” and “prescriptive recommendations,” but their reliance on alerts that merely raise attention to issues falls short of true decision support. At Noodle.ai, we go beyond alerts and provide recommended corrective actions to mitigate value-at-risk. These actions could include shipment expedites or inventory re-deployment, among others. Our AI system learns from previous actions and continuously improves its recommendations. Not only do we communicate the financial impact of each recommended action, but we also offer explainability and integration with planning and ERP systems for seamless execution. By automating the acceptance of these actions, Noodle.ai enables a closed-loop system, where AI optimizes profit and planners can focus their time on strategic decisions.
Noodle.ai’s “system of intelligence” complements existing planning systems by leveraging native probabilistic planning techniques. Our approach has successfully delivered accuracy, lift, and margin impact for industry-leading customers, even in environments with leading planning systems.
We invite you to speak with our experts to embrace the latest AI advancements and supercharge your planning stack.