Through a multi-year project, Darmstadt, Germany-based Merck will rely on sensors and algorithms to improve demand forecasts in its drug and healthcare products supply chain, reports The Wall Street Journal.
The German drugmaker hopes to develop an autonomous supply chain where computers make more of the materials and distribution decisions, said company CIO Alessandro de Luca.
Right now, the technology is still in testing stage. Engineers at Merck coded custom algorithms with machine learning techniques to analyze information — including external factors like natural disasters or trends in patient health — to generate forecasts of where and how much of the company's products will be needed, according to Mr. de Luca. This would allow Merck to respond faster and more efficiently to changing conditions.
Recent tests show the algorithms for the AI system are more accurate than humans 80 percent of the time. Once the new technology is fully implemented, employees currently in charge of demand planning could move on to more strategic roles managing the technology and algorithms for each product line, Mr. de Luca said in the report.
Mr. de Luca expects to move on from testing phases toward every day use of the AI system in 2017, according to WSJ.
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