AI Forecasts to Prevent Bottlenecks in Production and Supply Chains

According to a new ISG study, German companies are turning to predictive analytics in the wake of the energy transition.

Artificial intelligence has now reached a level of market maturity that enables manufacturing companies to stabilise their business even in the face of rapid market upheavals.

For example, with regard to fragile supply chains, AI forecasts are increasingly enabling companies to quickly identify and compensate for disruptions. This is shown by the new “ISG Provider Lens Digital Business – Solutions and Service Partners Germany 2021” by Information Services Group (ISG). According to the ISG study, it is not only the ongoing COVID pandemic that is driving the digitalisation of supply chain management. Increasing demands for sustainability and efficient energy supply and use are also driving this trend.

Automated digital supply chains

“Germany is a leading global logistics hub,” says Heiko Henkes, Director and Principal Analyst at ISG. “ISG is currently observing that more and more companies want to take advantage of automated digital supply chains, for example, to remain competitive through accurate demand planning and real-time demand management.” This, he said, now includes preparing for the Metaverse. The digitalisation of supply chains creates the prerequisite for being able to participate as a player in this new field.

The providers of the corresponding solutions and technologies must be able to support this on three levels: the technology, the company organisation and the business models. In addition, the leading providers would be characterised by in-depth industry know-how as well as extensive partner networks. Especially in Germany, as the leading country in the manufacturing industry, questions in the context of Industry 4.0 would also be a particular focus, the study continues.

Large service providers continue to dominate the market

“The market for solutions and services around digital supply chains is currently growing very fast,” ISG analyst Henkes continued. “Not only the pandemic, but also geopolitical upheavals as well as changed delivery and production systems within the framework of new business models are currently fuelling the market significantly.” Above all, the established large service providers would continue to dominate the market. “In the smaller SME market, smaller providers who are highly specialised in certain sectors are also successful,” says Henkes.