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Near Term Forecasting powered by AI

One thing that I find interesting in the AI movement is the creative use of data and algorithms to solve old problems in a new way or to solve new problems. My colleague, Vikram Srinivasan talked about one such new problem in a previous blog post:  AI is Changing Everything We Thought About Forecasting Demand. Vik discussed how AI is helping improve demand forecasting with additional data and new algorithms. Digging deeper, he mentioned an […]

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near term forecasting

One thing that I find interesting in the AI movement is the creative use of data and algorithms to solve old problems in a new way or to solve new problems.

My colleague, Vikram Srinivasan talked about one such new problem in a previous blog post:  AI is Changing Everything We Thought About Forecasting Demand.

Vik discussed how AI is helping improve demand forecasting with additional data and new algorithms. Digging deeper, he mentioned an area that I would classify as an entirely new problem: near term forecasting.

What is near term forecasting?  I would describe it as trying to predict what your customer’s next order will be.  This problem is even more prevalent for those selling through fast growing e-commerce channels.  That is, if you are a manufacturer selling through Amazon, Walmart.com, Home Depot.com, etc., the question you would like to know is what they will order from you next week (or next few days).

Traditional forecasting (even traditional forecasting enhanced by AI) helps you better plan production, inventory, and capacity.  And, it tells you when to expect bumps in demand (like for seasonality) and what growth you should plan for.

Near term forecasting is different.  Here our goals are short-term and tactical.  We simply care about what the next order will look like.  We care about this because this is how we get measured and penalized.  If the order comes in for 100 and we only deliver 50, we incur penalties.  And, if we short the order in one week, we can expect even more volatility in the weeks to come.

E-commerce retailers do provide a longer-range forecast on what they think demand for product will be.  But this forecast tends to be at a global level (aggregated across all sites) and not very reliable. Manufactures are often caught off-guard by the very erratic site level orders they receive each week.

In truth, E-commerce retailers often have a machine learning algorithm that place these orders. The algorithms account for not only the expected consumer demand, but also consider things like how many people are visiting the product webpages, whether the item was recently out-of-stock, and how the vendor has been performing in general.

So how can manufacturers keep up? What if they fought fire with fire? Or machine learning with machine learning in this case.  If manufacturers could learn to “reverse engineer” these order algorithms they could significantly improve their insights into coming orders and proactively adjust operations to avoid being caught off guard.

AI can help reverse engineer these algorithms.  It predicts what the order will be by using the same data the retailer has -or, at least whatever data the e-commerce retailer currently shares with its vendors.

In this sense, this problem is also closely related to the marketing AI problem of providing the next best action or the marketplace AI problem of giving a recommendation.  Ultimately, we are looking for our algorithm to tell us what the next action is likely to be.

Near term forecasting requires both internal data (previous orders, previous delivery performance) and data from the e-commerce retailer’s portal (out of stock information, pageview information, pricing changes for the product).

AI is opening up many new problems to solve.  And, with the continued rise of e-commerce, areas like near term forecasting will be more and more common.

Mike Watson is Senior Vice President Opex Analytics Division of LLamasoft. With a PhD in Industrial Engineering and 20+ years of experience leading global business teams at LogicTools, ILOG and IBM, Mike brings deep analytics and supply chain optimization expertise to the team. He pairs technical expertise with a personal approach to helping customers design and implement successful enterprise solutions.

Source: https://logisticsviewpoints.com/2020/05/19/near-term-forecasting-ai/

Automotive

Mercedes-Benz launches sales of its premium all-electric EQV van

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Mercedes-Benz is now selling its EQV 300 all-electric premium van in Europe, the second EV to come out of the automaker’s initiative to produce a line of battery-powered models under its new EQ brand.

A concept version of the EQV was first shown in March 2019. But unlike so many concepts destined for nonexistence, this one was marked for series production. The EQV, which can seat up to 8 people, is designed to appeal to customers seeking a more luxurious ride. The base price of €71,388 (about $78,359) provides a hint at who Mercedes is aiming for.

Mercedes is marketing this toward families, upscaled adventurers and corporate clients who might be looking for a shuttle vehicle. The vehicle’s seating can be configured in numerous ways to meet various customers’ needs. It can also be customized for packages, not people.

The EQV comes with a compact electric drivetrain on the front axle that produces 150 kW, or 201 horsepower as well as a 100 kWh battery pack and can travel an estimated 418 km (260 miles) under Europe’s WLTP standards. The company is also showcasing its MBUX infotainment system in the EV, which has a number of tech-forward features such as a self-learning voice control system with connectivity features.

Mercedes is selling the EQV 300 and a longer wheelbase version called AVANTGARDE. Both will be produced at the company’s plant in Vitoria in northern Spain, alongside the V-Class and the Mercedes-Benz Vito.

The van comes with a four-year maintenance plan that covers the battery up to 160,000 km or eight years. Buyers also get the company’s navigation services for free for 36 months as well as a membership to EV charger Ionity each for one year. Owners will also have one-year free access to Mercedes me Charge. The feature shows the charging infrastructure network in Europe and lets users start, stop and pay for charging via the Mercedes me app, a credit card or through the media display in the vehicle.

Mercedes announced its “EQ” technology brand in 2016. Since then the company has unveiled several “EQ” related concepts as well as its first series-production vehicle, the EQC electric drive SUV. The company has previously said it plans to invest more than $12 billion to produce a line of battery-powered models under its new EQ brand and spend another $1.2 billion in global battery production.

Source: https://techcrunch.com/2020/05/26/mercedes-benz-launches-sales-of-its-premium-all-electric-eqv-van/

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Automotive

Mercedes-Benz launches sales of its premium all-electric EQV van

Published

on

Mercedes-Benz is now selling its EQV 300 all-electric premium van in Europe, the second EV to come out of the automaker’s initiative to produce a line of battery-powered models under its new EQ brand.

A concept version of the EQV was first shown in March 2019. But unlike so many concepts destined for nonexistence, this one was marked for series production. The EQV, which can seat up to 8 people, is designed to appeal to customers seeking a more luxurious ride. The base price of €71,388 (about $78,359) provides a hint at who Mercedes is aiming for.

Mercedes is marketing this toward families, upscaled adventurers and corporate clients who might be looking for a shuttle vehicle. The vehicle’s seating can be configured in numerous ways to meet various customers’ needs. It can also be customized for packages, not people.

The EQV comes with a compact electric drivetrain on the front axle that produces 150 kW, or 201 horsepower as well as a 100 kWh battery pack and can travel an estimated 418 km (260 miles) under Europe’s WLTP standards. The company is also showcasing its MBUX infotainment system in the EV, which has a number of tech-forward features such as a self-learning voice control system with connectivity features.

Mercedes is selling the EQV 300 and a longer wheelbase version called AVANTGARDE. Both will be produced at the company’s plant in Vitoria in northern Spain, alongside the V-Class and the Mercedes-Benz Vito.

The van comes with a four-year maintenance plan that covers the battery up to 160,000 km or eight years. Buyers also get the company’s navigation services for free for 36 months as well as a membership to EV charger Ionity each for one year. Owners will also have one-year free access to Mercedes me Charge. The feature shows the charging infrastructure network in Europe and lets users start, stop and pay for charging via the Mercedes me app, a credit card or through the media display in the vehicle.

Mercedes announced its “EQ” technology brand in 2016. Since then the company has unveiled several “EQ” related concepts as well as its first series-production vehicle, the EQC electric drive SUV. The company has previously said it plans to invest more than $12 billion to produce a line of battery-powered models under its new EQ brand and spend another $1.2 billion in global battery production.

Source: https://techcrunch.com/2020/05/26/mercedes-benz-launches-sales-of-its-premium-all-electric-eqv-van/

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Automotive

Where these 4 top VCs are investing in manufacturing

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Even though it’s a vast sector in the midst of transformation, manufacturing is often overlooked by early-stage investors. We surveyed top VCs in the industry to gather their perspectives on the challenges and opportunities facing manufacturing.

Traditionally, manufacturing companies are capital-intensive and can be slow to implement new technology and processes. The investors in the survey below acknowledge the long-standing barriers facing founders in this space, yet they see large opportunities where startups can challenge incumbents.

These investors noted that the pandemic is bringing overnight change in the manufacturing world; old rules are being rewritten in the face of worker safety, remote work and the need for increased automation. According to Eclipse Ventures founder Lior Susan, “COVID-19 has exposed the systemic vulnerabilities inherent to manufacturing and supply chain and, as such, significant opportunities for innovation. The market was lukewarm for a long time — it’s time to turn up the heat.”



What trends are you most excited about in manufacturing from an investing perspective?

Digital solutions that offer manufacturers greater agility and resilience will become major areas of focus for investors. For example, manufacturers still reliant on manual assembly were unable to build products when factories closed due to the coronavirus lockdown. While nothing would have kept production at 100%, the ability to quickly pivot and engage software-defined processes would have allowed manufacturing lines to continue building with a skeleton crew (especially important for any facility required to implement social distancing). Such systems have remote monitoring capabilities and computer vision systems to flag defeats in real-time and halt production if necessary.

Source: https://techcrunch.com/2020/05/26/where-these-4-top-vcs-are-investing-in-manufacturing/

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