Supply chains in

the cognitive era

How technology plus
humans will boost
predictive capabilities.
Developments in technology, including artificial
intelligence (AI), machine learning and the Internet of
Things (IoT), offer the opportunity to take a high-powered,
cognitive approach to supply chain optimization. With
smart use of these tools, businesses will transform their
supply chain management by anticipating problems and
developing solutions before they occur.

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What is a cognitive supply chain?
A “cognitive supply chain” utilizes
Cognitive IoT (CIoT), among other
technologies, to harness predictive
analytics and machine learning
to support better, more proactive
decision-making.
Supply chain managers can
now better access vast amounts
of data from deep inside the
supply chain, including areas
and events that were previously
siloed or unstructured. For
example, the complete chain of
custody, entire travel routes and
ambient conditions can now be
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reconstructed out of the diverse
data stores that log sign-ins and
sign-outs. They can combine
historical, real-time and predictive
data (such as weather forecasts,
predictive traffic patterns and
freight capacity). Then they use
cloud-based platforms to greatly
enhance the value of that data via
AI to guide business processes and
problem-solving. All supply chain
areas stand to benefit, including
asset, inventory, fleet and energy
management.
Make insights actionable
Mapping technology is a good
example of an underutilized
data source. Initially, mapping
technology was seen as purely
taking physical maps and digitizing
them. Now, enterprise-grade
location, geographic information
system (GIS) data and solutions are
creating living, three-dimensional
maps that grow upwards, constantly
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populated with fresh layers of
information and insights. Digitized
mapping now includes layouts of
warehouses, airports and private
yards, as well as weather, traffic
and how people flow through cities.
Knowing where your cargo is, at any
moment, has never been easier.
Advanced location intelligence is a
game-changer.
Further, supply chain technology
companies are collecting and
disseminating data about many
other things that supply chain
managers need to know. These
include temperature, humidity,
shock and broken security seals,
to name just a few. Visibility now
means almost unimaginably more
than “where are my assets?”
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But the real magic – the cognitive
part – comes when supply chain
professionals make sense of
that information. When data is
augmented with vastly improved
ways of analyzing it, they can attain
predictive capabilities. This can be
achieved via AI-powered platforms
such as IBM’s Watson or the HERE
Open Location Platform.
Visibility: the holy grail
In survey after survey, the vast majority of supply chain executives list
visibility as one of the major hurdles they encounter. A recent survey of 623
supply chain professionals by 3PL provider, Geodis, found that companies
were struggling to meet their supply chain goals. In fact, only 6% of those
surveyed claimed they had full visibility into their supply chains.

In fact, a dismal 6% of respondents said they

had full visibility within their supply chains.

Now, those same supply chain
managers have access to
unprecedented visibility, offering
the chance of achieving peak
supply chain optimization. Not
only will managers be able to deal
with problems when they happen,
but they will be able to predict
them and put actions in place to
prevent or minimize disruptions.
This moves the supply chain from
being in a permanent reactive state
to becoming predictive, cognitive
and potentially even self-healing.
Obviously, this is a much-desired
outcome to optimize operations.

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Moving toward that outcome,
HERE founded the Institute of
Advanced Research in AI (IARAI)
in Vienna around the beginning of
2019. The institute aims to harness
the power of AI to solve some of
modern technology’s most pressing
problems, including the need for a
more predictive, cognitive supply
chain. Its mission is to focus on the
intricate problems that can only be
solved using massive geolocation
datasets, deepening the location
intelligence needed to anticipate
and overcome tomorrow’s
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supply chain, public sector and
transportation challenges. Its
current traffic4cast challenge at this
year’s NeurIPS conference and the
associated research are but one
part of this endeavor.
“The unique data and expertise
that HERE offers for open academic
research is a game-changer for
the construction of realistic AI
models,” said Dr. Sepp Hochreiter,
founding director of IARAI, artificial
intelligence pioneer and inventor of
the long short-term memory (LSTM)
neural network framework.
Data + AI + humans = the magic formula
There are two main challenges to achieving a truly cognitive supply chain:
making sure we get the right data out of the enormous quantities available
and ensuring that AI empowers humans to do what they do best – make
smart decisions based on good information.

First, we need to ensure that the is valuable data and what is not.
data we have is usable and relevant. For example, a retailer in its second
A Boeing 777 creates around 4 year in a foreign market should
terabytes of telemetry data on a analyze movement of goods during
transatlantic journey. The data an annual holiday, but may not
points – just for that one piece of have a use for temperature data if
the puzzle at one company – are in both the product and local weather
the millions. Filtering for exceptions are stable. According to the World
and potential problems is crucial*. Economic Forum, the entire digital
Supply chain is no exception. universe is expected to reach 44
Managers need not only the zettabytes by 2020**. That’s 40 times
expertise, but the technological and more bytes than there are stars in
managerial guidance to know what the observable universe.

* https://computerworld.com/article/3417915/boeing-787s-to-create-half-a-terabyte-of-data-per-flight--says-virgin-atlantic.html
** https://weforum.org/agenda/2018/01/data-is-not-the-new-oil/

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Striking a balance
Artificial intelligence is a wonderful
tool for sifting and analyzing data,
then coming up with useful insights
into extremely complex scenarios.
The technology can now identify
a roadside business from logos
observed in street-level imagery,
route people to the correct entrance
of a building or optimally route
entire fleets of vehicles. In April
2019, a team built and trained by
research company OpenAI, for the
first time, beat the current world
champions of online battle game
Dota 2 in a public competition. A
slew of similar headlines in the last
few years make it clear that you can
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learn extra-sophisticated strategies
by applying AI to human activities
far beyond gaming.
But there’s a need for humans, too,
since they provide valuable context
to data based on internalized
historical and predictive patterns.
Which driver should I place on
which route? Where do I store my
inventory – on the road in trucks or
in new-build distribution centers
placed strategically? Should I take
a just-in-time approach? And,
perhaps, most importantly, what is
my backup plan when something
goes wrong?
The trick to successfully harnessing
the power of cognitive intelligence
is to adopt a human-plus-AI
approach; something many
people refer to as Intelligence
Augmentation (IA). Forbes
describes IA as “an alternative
conceptualization of artificial
intelligence that focuses on AI’s
assistive role in advancing human
capabilities.”
The pairing of humans and AI is
not without precedent in fields
outside of logistics. AI is currently
used in cancer diagnosis to assist
pathologists in identifying abnormal
images, but experts don’t foresee
algorithms replacing medical
professionals any time soon. The
intent is to guide radiologists
toward more accurate conclusions.
Cognitive supply chain optimization
uses AI’s ability to gather and
crunch huge amounts of data to
identify patterns and anticipate
problems, and combines it with the
human talent for figuring out what
to do about those problems.

Together, cognitive learning technologies and humans

can achieve more than they do separately.

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Reaching for the future
Although AI promises to revolutionize supply chain practices,
implementation projects should be robust enough to usher in the
changes expected.
Supply chain managers aren’t the
only ones who have to contend with
data siloes, but uniting disparate
data sources is especially critical
when implementing AI. Supply
chain data tends to sit on multiple
systems, on multiple networks, and
often with multiple owners. Data
hygiene and system interoperability
are perpetual challenges.
Standardization approaches across
API interoperability have or are
being implemented in almost
every technical discipline. One of
these is SENSORIS, a consortium
that includes HERE among its
members, introduced a global
standardized interface specification
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for vehicle-to-cloud data in 2016 to
facilitate connected and automated
driving. After interoperability, the
next challenge is determining
exactly what data is needed, how to
get it, how to check its accuracy and
how to feed it seamlessly into your
own IT systems. As counterintuitive
as it may seem, AI can help identify
data challenges by proactively
identifying dirty data. The data
flood that IoT has initiated is both a
boon and a curse of implementing
new AI technology, as humans and
algorithms have to jointly identify
what information is important and
what is just “noise.”
A leap into supply chain optimization
CIoT, predictive analytics, machine chain optimization.
learning and artificial intelligence
Forward-thinking leaders are using
will disrupt the supply chain
this disruption to optimize their
ecosystem and the way we do
supply chains and push the quality
business. We can move far, far
of their solutions to a new level.
beyond the initial promises
Before implementing AI solutions,
of computerization — smarter,
ensure that your goals are clearly
faster, cheaper — into the realm
identified and that you’re able to
of super-intelligent. A crucial
fully leverage the insights that
part of that is making the most
AI will surface.
of location intelligence in supply

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To learn more about the future of supply
chain technology and the role of location
tracking, visit here.com or 360.here.com.

Contact Us

About HERE Technologies

HERE, the Open Location Platform company, enables people, enterprises and cities to harness the power of
location. By making sense of the world through the lens of location we empower our customers to achieve better
outcomes – from helping a city manage its infrastructure or an enterprise optimize its assets to guiding drivers
to their destination safely. To learn more about HERE, including our new generation of cloud-based location
platform services, visit 360.here.com and here.com

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