By Sourcing Journal
To some, the rise of artificial intelligence signals the decline of humanity; to others, it brings the promise of new tools that can help humans reach new heights.
Paul Magel, president of the business applications divisions at CGS, aligns with the latter group, as he expressed in a conversation with Sourcing Journal founder Edward Hertzman as part of Sourcing Journal’s Global Outlook event.
Likening the arrival of AI to household power tools, Magel told Hertzman that the most efficient companies of the future will be those that utilize AI best.
“While it is a very disruptive technology.…it’s going to be much more of actually a less disruptive use case as people will start to just make it part of their everyday use,” he said. “Whether it’s sales, production, design or distribution, they’re going to have much smarter tools.”
For the sourcing and retail world, specifically, Magel sees the most immediate and most valuable applications of AI is in forecasting demand and right-sizing inventory needs.
“History is no prediction of the future,” Magel said. “But if you’ve got tools that can scour the Internet, see what’s selling across multiple platforms and multiple shopping carts and understand demand in a real-time basis…[you can ask] what can I deliver in the next six days to maximize the profitability of what we’re trying to accomplish and capture that demand in real time?”
Magel warned that despite AI’s ability to learn from everything it finds on the Internet, its accuracy and usefulness are only as good as the data it has to work with. Hearkening to the age-old saying, “garbage in, garbage out,” Magel emphasized the importance of giving the machine “clean data” with which to work.
“It doesn’t matter how powerful that tool is,” Magel said. “If we automate a broken process, we just break down that process much faster.”
Often, unreliable data, or imprecise ways in which the user asks ChatGPT or another AI chatbot a question can result in what has become known as “hallucinations,” which often elicit inaccurate responses. That human learning factor of how to better communicate with the technology, along with how humans will decide to handle intellectual property issues surrounding content generated by AI, will be key to watch, Magel said.
The executive urged companies to use AI to navigate market disruptions that will be coming faster and with less lead time to react.
“If you need a better order entry tool, a better forecasting tool, you need to add quality management, or you want to digitize down to the operator and have an IoT device on the sewing machine, you can look at our platform…and pick the pieces you want in any combination and deploy them very quickly,” Magel said. “You’re getting a much quicker return on the benefits of the technology that you’re deploying.”