Leveraging AI Demand Forecast & Inventory: Transforming the Construction Supply Chain
Supply chain management is an essential component of the construction process and without careful planning, it can result in costly wastage of over-supplied materials or time-sapping disruptions whilst awaiting deliveries.
We recently issued a poll in which we asked, "How do you think AI will revolutionise the construction supply chain?" The most commonly voted answer was "AI Demand Forecast & Inventory". Considering the risks listed above and the implications of those risks materialising, it is of little surprise that the construction industry is considering ways in which this advanced technology can be deployed to good effect.
It is, in fact, entirely possible that incorporating AI demand forecasting and inventory management tools into the standard project planning suite could deliver transformative change to the way in which the construction industry operates, streamlining project delivery, reducing costs, achieving sustainability targets and improving workforce allocation.
Why is traditional inventory management so challenging?
Traditional, manual methods of inventory management have many flaws. Firstly, they are inefficient; they often result in firefighting activity as materials are incorrectly located, and customer demands are always subject to change, increasing the likelihood that materials stored will become obsolete or defective before they are required.
It has often been the case that project planning personnel will attempt to overcome these issues by overestimating what they will need, but as material costs continue to rise, this process becomes ever-more expensive, and wastage must be accounted for and sustainably disposed of, which again comes at a cost.
How will AI revolutionise inventory management?
There are many ways in which AI technology, when properly implemented and managed by a sufficiently trained and experienced person or team, will deliver significant business benefits.
Firstly, it will eliminate the need for labour-intensive manual checks of stock. All stock that is ordered will be scanned in on arrival, its location recorded, and any movements tracked to ensure complete accountability.
Not only will accountability be improved, but because it will be possible to know the location of all materials owned by a particular construction firm, demand planning is eased. There will no longer be a requirement to overestimate "just in case", and instead, the correct demand-based order can be placed. Machine learning and predictive analytics will support this process by analysing historical data and predicting with incredible levels of accuracy the materials that will be required, and when.
The ability to match demand planning to the project schedule will deliver vast improvements in project oversight, allowing managers to make data-driven decisions, allocate personnel more effectively, reduce downtime and shorten timescales. All of this will, of course, result in impressive cost savings without sacrificing quality.
Speedy Hire case study
Speedy Hire is one company whose investment in AI demand forecasting and inventory management software is certainly paying dividends. The company has reported that since it began using this technology, it is making a 4% saving on inventory despite an 8% increase in demand , leading to an impressive return on investment.
How easy will it be for the construction industry to implement this technology?
The potential for this technology is boundless and could revolutionise the UK's construction industry. However, the biggest hurdle to overcome is, as usual, staffing. The industry remains plagued by vacancies, and implementing a new technology such as this requires that dedicated personnel are hired or trained and the system appropriately integrated into existing workflows such that it can be used effectively.
Failing to invest in the upskilling that is required to implement this technology will result in it being misused or not used, both of which would have devastating consequences not only for the company's budget but also for staff morale.
The good news is that there is plenty of skilled talent outwith the construction industry that could be targeted to fulfil a role that is focussed on implementing, embedding and supporting companies to adapt to the ways in which the technology can simplify and improve their working experience.
This will require construction companies to think outside of the box and to compete with other industries in which this skill set is required. However, the benefits that are available are worth the challenge and could lead to further increases in efficiency and productivity as this skilled talent could identify further improvements to the current ways of working.
At Build Space, we have access to an unrivalled talent pool of experienced and available project staff with AI and software integration experience who could bolster your workforce on a temporary or permanent basis, supporting you to revolutionise your supply chain and paving the way for increased efficiency and greater project success. To find out more, please contact us today.