Oracle recently upgraded its Fusion Cloud Supply Chain and Manufacturing (SCM) suite with new UX enhancements, allowing customers to leverage AI to improve and accelerate tasks, boost productivity, and more.
“People don’t actually care about artificial intelligence. What they care about is productivity. How much work can we get done with the people that we have, and how can we make their actions and work more effective? AI is seen as a way, and rightfully so, to get there,” said Derek Gittoes, vice president, supply chain management product strategy at Oracle, in an interaction with AIM on the sidelines of Oracle CloudWorld 2024 in Las Vegas.
Logistics Cost is No Play
In the United States, the cost of logistics, which includes storing and transporting inventory, accounts for approximately 9% of the country’s GDP.
“If you took that money and made a country, you’d be the 12th largest economy in the world. And, when you go to other regions, like India, that percentage is much higher, with about 15% of the GDP being spent just on logistics.”
Gittoes believes that if those costs can be reduced, it could result in significant savings, allowing funds to be invested in more valuable areas rather than simply storing inventory. Cost pressure is a key factor, driven by inflation, as well as labour-related expenses.
Keeping all this in mind, Oracle’s strategy of using AI to improve productivity in the process of reducing cost is no small feat.
AI in Supply Chain
Earlier this year, Oracle announced enhanced features to its SCM suite, bringing in prediction-driven supply chain command centres with the aim to optimise their supply chain operations.
In the recent interaction, Gittoes emphasised on operational efficiency being a vital criteria for supply chain, considering disruptions, labour shortages and inflationary pressures. He believes that AI in SCM will help workers automate routine tasks and focus on higher-value activities.
Oracle’s Smart Operations initiative for manufacturing is also helping with the efficiency of frontline workers in the supply chain, where tasks, such as summarisation of work orders for factory workers, can be enabled with AI.
“Instead of taking 30 minutes to go find the repair status, it’s given to you by the agent in 30 seconds,” said Gittoes. “There’s actual value in those savings.”
In transportation, AI has been extensively used to help with predicting transit time. “We’ve introduced digital assistance to help. He explained that rather than having someone call to inquire about the arrival of a shipment or the status of an order, the response now comes from digital assistants instead of a person.
Gittoes highlighted the situation in the United States, where freight transportation produces more carbon emissions than coal-powered electricity. Therefore, measures to manage this more efficiently are crucial.
Gittoes explained that this was one of the reasons they introduced the new solution, addressing sustainability, disruptions, cost inflation, and leveraging technologies like RFID, inventory tracking, and artificial intelligence to automate tasks.
He also emphasised on using AI-based RFID systems to automate the tracking and replenishment of inventory, allowing hospitals to focus on patient care rather than logistics.
Big Guys Stand by Oracle
Oracle has a long history of providing cloud suite products for major players in the market. Global logistics company DHL has been one of the largest customers of Oracle in supply chain management. The company has been leveraging Oracle Fusion Applications Suite and using a consistent dataset across multiple teams to improve business decision-making and data quality.
“We need to double down now. [Our] first priority is to really take everything out of the tool [and] utilise it. And then it’s about insight creation that drives value for the business and better,” said Dietrich Franz, the CFO of supply chain at DHL, in a chat with Steve Miranda, executive vice president, applications development, Oracle, at the CloudWorld event.
Similarly, Unilever is another trusting customer. The major consumer goods company is said to have cut CO2 emission and lowered transportation cost across the USA with Oracle’s transportation management solution.
What are the Others Doing?
Reportedly, Oracle’s supply chain management is majorly used by larger corporations with over 1000 employees and with revenue over $1000M. However, it’s obvious that Oracle is not the only one catering to some of the crucial players in the market.
Software company SAP has been an incumbent player in the supply chain management systems space. Many companies across consumer, automobiles and retail markets have been relying on SAP’s products, including PepsiCo, BMW, and Walmart.
SAP has also unified its spend management solutions under a bucket termed Intelligent Spend and Business Network (ISBN) to which generative AI has now been integrated.
Interestingly, assistants (or rather AI agents) had been the key theme for major enterprise players over the past few months. Oracle, Salesforce and others have announced a number of AI-powered agents across their product suite. Oracle even has an ambitious goal of moving all their applications to autonomous databases by 2025, as mentioned by Oracle chief Larry Ellison in his keynote address at Oracle CloudWorld 2024.
However, Oracle seems to be on the route to quick adaptation. Gittoes explained that organisations must adapt quickly to such disruptions. “At any point in time, any organisation is dealing probably with at least one, if not two, major disruptions,” he said.
