PARIS — Michelin Group is tapping artificial intelligence (AI) to address supply chain challenges, according to Gilles Colas des Francs, responsible for the AI transformation factory at the French group.
The company's "Project S@@M" (Service Alerting and Acting Machine) employs AI to predict shortcomings in the supply chain as early as three weeks in advance, allowing enough time to react and avoid shortages, Mr. Colas des Francs said in a presentation at Assises de la Data Transformation Conference Jan. 28.
The idea of S@@M emerged two years ago when the French group decided to use AI to manage the increasing complexity of its supply chain — to provide the client with the right product, at the right time and the right place with the right price.
"We created a team of data scientists and supply chain experts to see how AI could solve this problem and better anticipate the supply shortages," he said.
"After several months of iteration and in-depth work on data we designed an algorithm that can predict supply chain shortages three weeks in advance."
The algorithm, he said, allows Michelin not only to plan ahead but also helps it understand why supply shortages may occur.
"Is it, for example, a manufacturing problem or a problem of poor market forecasting or simply poor logistics management?" he asked.
The program has been rolled out in Europe with 4,000 products on 15 different stores in the region, he said, representing 60,000 separate stock-keeping entries that needed to be accounted for.
Through the project, Michelin has managed to gain eight customer service points on 10% of the hardest products to manage in its supply chain.
Mr. Colas des Francs added that the development of the algorithm led Michelin to create the AI Transformation Factory within its corporate structure to help various business areas determine how to use AI effectively to create value. The company is now deploying the concept at operations worldwide, he added.