Mitigating Market Disruption Using AI in Manufacturing


Over the past two years, the manufacturing industry has faced a myriad of challenges and disruptions, from Brexit and a global pandemic, to supply chain issues and now inflation. These periods of volatility have triggered substantial investment in digital transformation within the industry, to keep manufacturers agile and survive.

Manufacturing is data rich, it is increasingly critical to use this data as an intelligent resource to guide decision making to optimize cost, revenue and margin. This is where artificial intelligence (AI) comes in. Deep and far-reaching digital transformation can only happen when manufacturers embrace the power of AI to drive decision-making. Without it, the efficiency, profitability and long-term success of digital transformation are compromised.

AI can use real-time data points from every department and touchpoint in a manufacturing company. By intelligently analyzing these data sources in conjunction with each other, AI enables manufacturers to make more effective decisions about operations, supply and demand, pricing and product offerings. AI can respond to disruptions faster and more accurately than a human, immediately adjusting prices, across a product portfolio, to account for supply chain issues, inflation and other external factors . It can also predict how demand will react to price changes during these volatile times, helping manufacturers ensure that price changes don’t lead to demand that ultimately cannot be met.

One of the key benefits of AI for manufacturing is the technology’s ability to help manufacturers deliver more personalized shopping experiences to customers, in which companies are proactive to customer needs, agile to changing market conditions and stay ahead of their competition with real-time analytics. For example, AI can offer:

  • Optimized recommendations around prices
  • Provide buyers with specialized, adapted and consistent offers, in which the right price is identified at the right time.

Wacker Chemie leverages PROS platform technology in its pricing and quoting process, leveraging AI-powered tools to optimize every buying and selling experience. Dirk Ramhorst, CIO (Chief Information Officer) and CDO (Chief Data Officer) of Wacker Chemie said: “Anything we can learn from other quotes and what is happening in the market is automatically generated by a better price than we offer to our customers. The shopping experience is also enhanced by AI which streamlines the sales and ordering processes to make them more efficient and immediate for the customer.

The flexibility enabled by AI in turn allows manufacturers to adopt new modern business models that optimize revenue streams. For example, AI data-driven insights have already encouraged some manufacturers to lease, rather than sell, heavy machinery and generate additional revenue through subscriptions and add-ons. This is part of an AI-enabled shift from manufacturing as a traditional industry to a service industry, where products as a service are more lucrative and profitable. AI has thus facilitated the emergence of new economic models for the manufacturing industry.

It’s no secret that manufacturers are operating in a much tougher environment than ever before. They have to deal with:

  • Volatile input costs
  • Supply issues
  • Fluctuating demand
  • Go from one price change per year to several per year.

At the same time, their customers want to do business with them through a variety of channels in an era of high price transparency. With huge expectations for personalization, speed, and consistency across all channels, AI is empowering manufacturers to tackle this task.

Nick Boyer is Director of Strategic Consulting at PROS.


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