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Beyond Hype: How AI Is Changing Industrial Mid-Market Companies

Integrating artificial intelligence (AI) into the industrial manufacturing space is no longer just a futuristic idea but a reality transforming mid-market companies. While many discussions about AI focus on its potential, numerous firms already use it to revolutionize their operations.

Moving beyond speculation, these companies are tackling specific challenges and discovering new opportunities, setting a standard for innovation and efficiency in the mid-market sector. From improving maintenance and optimizing supply chains to enhancing quality control and customer service, AI is more than just a buzzword. It’s a powerful tool that’s redefining business models and strategies, helping companies thrive in an increasingly AI-driven world.

The topic of AI was a key focus at Cherry Bekaert's recent Modernizing Manufacturing Executive Symposium, which featured several panel discussions with top industry executives. At the event, Cherry Bekaert Partner and Industrial Manufacturing & Consumer Goods Leader Jason Hodell, along with Regions Bank Executive Vice President & Commercial Banking District Director Mary Beth Coke, hosted a session where three executives shared how their companies are embracing AI to manage risk, provide strategic insights and drive growth, among many other benefits.

The panel included Paul Noble, Founder of Verusen; Vish Narendra, CIO & SVP of Global Business Services at Graphic Packaging International; and Chuck Thompson, CEO of Specialized Property Management. This article aims to share insights from the panel discussion on how AI is reshaping mid-market manufacturing.

AI in Supply Chain

Drawing on his extensive experience in the industrial supply chain sector and noticing the challenges manufacturers and suppliers face — especially during disruptive periods like the COVID-19 pandemic — Paul Noble launched Verusen to revolutionize supply chain operations by leveraging system data and human knowledge for faster, smarter decisions.

Verusen, a supply chain intelligence company, helps global supply chains understand the materials used in their operations. By leveraging AI, the company simplifies complex data and human interaction problems, delivering significant and swift value to its customers.

Verusen focuses on materials optimization by leveraging advanced data analysis to reduce unnecessary inventory and improve procurement processes. A standout feature of Verusen’s approach is its purpose-built AI, designed to garner valuable insights and offer actionable recommendations even when dealing with incomplete or “dirty” data. This innovative capability enables clients to effectively manage working capital, mitigate risks and enhance operational efficiency. But what exactly does Noble mean by “purpose-built AI?”

“Purpose-built is the future.”
Paul Noble
Founder, Verusen

Utilizing Data To Drive Outcomes 

According to Noble, the "secret sauce" lies in starting with data and applying purpose-built intelligence across the supply chain. This approach allows manufacturers to analyze SKUs across multiple locations, detect demand signals and manage safety stock assumptions effectively.

Many companies, ranging from small enterprises to larger entities, deal with fragmented and complex systems. But Noble highlights the importance of choosing the right technology, emphasizing the role of visualized and purpose-built intelligence. By implementing deep learning networks, AI can read and interpret material descriptions, even when different plants and suppliers use varied terminologies. This capability enables the creation of probabilistic models that recommend optimal inventory levels, minimizing the risk of stockouts and ensuring transparency and consensus among stakeholders.

“So, if I can wrap my arms around my network and understand what my company needs inside my four walls or across the globe, now I can share that information with my suppliers.

I can start extending my network, getting more accurate lead times, that can then be fed back into models that can continue to reduce working capital without introducing risk. And everyone’s satisfied across operations, procurement, finance and IT, and you’re all working together in new ways because you invested in this intelligence that can help scale the systems you have today.”
Paul Noble
Founder, Verusen

The integration of AI into existing systems simplifies inventory management, allowing companies to respond quickly to changes in demand and supply. This adaptability is crucial for transferring knowledge and optimizing networks, especially within rapidly growing companies, leading to more strategic spending and continuous data-driven improvements. The rinse-and-repeat nature of this approach opens up new use cases, empowering manufacturers to understand their needs within and beyond their facilities. By sharing insights with suppliers, companies can achieve more accurate lead times and reduce working capital without increasing risk, aligning operations, procurement, finance and IT toward common goals.

Purpose-Built AI’s Impact on Manufacturing Operations

As Verusen's first customer, Vish Narendra of Graphic Packaging International (Graphic Packaging) shared insights into the company’s role and achievements in using the purpose-built AI solution to enhance its supply chain intelligence.

Graphic Packaging is a leading packaging manufacturer for hundreds of the world’s most recognizable brands. The company emphasizes operational excellence across the supply chain and strives to make responsible consumption choices available to consumers. Narendra highlighted the company’s impressive growth, including a number of acquisitions that have expanded its global presence. Currently, it operates over 100 manufacturing facilities.

Due to this growth, the company has been investing heavily in technology transformation, partnering with Verusen for the past four years to enhance their supply chain intelligence, a decision that Narendra acknowledges has been proven to be highly valuable, allowing Graphic Packaging to gather significant insights and drive efficiencies across their operations to better serve major consumer brands that use their products.

The partnership between Verusen and Graphic Packaging provides a practical use case of how AI is solving complex operational challenges. The company has undergone numerous acquisitions and faced the daunting task of managing multiple ERP systems. AI plays a pivotal role in standardizing processes and optimizing inventory across various plant operations. By analyzing vast amounts of data, the AI engine identified opportunities to lower inventory levels, thereby improving profitability and cash flow — key metrics for the company's success.

“ERP at the core, and then a lot of best-of-breed solutions wrapped around that is the way to go. And as Paul said, these purpose-built solutions can easily plug and play with these ERPs. They’ve got all the data that you might need, but at the same time, they can’t solve every single problem.

So, we’re using these kinds of tools — Verusen is one of them — we’ve got a plethora of other things we’re leveraging to solve very specific problems. It’s really helped us a lot.”
Vish Narendra
CIO & SVP of Global Business Services, Graphic Packaging International

The implementation of AI-driven solutions has been transformative. It enables the company, and others like it, to quickly identify overstock situations and reallocate resources efficiently, reducing lead times and enhancing operational responsiveness. On any given day, AI tools can uncover millions in potential cost savings, directly contributing to the company's objectives and shareholder value.

In asset-heavy industries, where machine failures can disrupt operations, AI's ability to swiftly identify and move necessary components between locations ensures minimal downtime. This capability underscores AI's critical role in driving operational efficiencies and maintaining competitive advantage in the manufacturing sector.

Beyond Manufacturing: AI in Customer Service and Real-Time Analytics 

Chuck Thompson shared how his company, which operates in the property management sector, has effectively utilized AI to enhance customer services and drive growth. Unlike industrial manufacturing companies, Specialized Property Management manages single-family rentals for investors, institutional funds and public companies.

Historically, the property management industry has been comprised of small, local operators, making it difficult for companies within the space to scale, a sentiment similar to that of the industrial manufacturing industry. However, Thompson’s middle-market company has leveraged AI, even with limited resources in the form of minimal investment and a small workforce. 

Over the past four years, the company has spent roughly $4 million on technology advancements, with $1.2 million invested in AI. Their technology stack incorporates solutions for data ingestion, data transformation, data storage and processing, and predictive analytics. Altogether, this has resulted in being “a complete game-changer” for the company, improving internal efficiencies and customer interactions.

As early adopters of AI, the company first implemented robotic process automation (RPA) across its operations. It used AI-driven solutions to handle customer inquiries and developed an internal help desk for streamlined communication. Moreover, by implementing sentiment analysis with all of its data, the company can better understand and predict customer needs throughout the entire lifecycle rather than focusing on critical inflection points. Thompson points out that this will significantly reduce customer attrition and make a sustainable impact on any company's service model.

Customer Phone Calls

Thompson pointed out key AI innovations his company has implemented, including the use of AI-driven voice applications to promptly manage customer service inquiries around the clock, provide real-time responses and solve customer problems efficiently and effectively. Moreover, the AI system’s ability to handle communications led to a 27% reduction in phone calls, allowing employees to focus on more complex tasks and improve overall productivity.

Customer Email Inquiries

AI also revolutionized email management within the company by using a custom-built algorithm to route each message to the appropriate department or individual, achieving a remarkable 97% accuracy rate. This efficient routing system ensures that customer and internal inquiries are handled by the best-suited personnel, enhancing resolution times and reducing the burden on support staff.

Real-Time Analytics

In addition to handling customer calls, Chuck's company utilizes AI for real-time analytics. By engaging with the AI system, management teams receive up-to-date insights on financials and operational metrics. This allows them to conduct "what-if" scenarios and gain predictive insights, empowering informed decision-making. The AI system's machine learning capabilities continually improve its analytical depth, providing valuable information that guides strategic planning across the organization.

Training Videos

Additionally, the company’s use of AI extends beyond operational efficiency to include employee training and knowledge creation. By converting extensive training documents into engaging video content, his company ensures that employees can access essential information quickly, facilitating faster learning and better retention. This approach not only enhances the training experience but also supports quality control by providing content in multiple languages, catering to a diverse workforce.

By embracing AI and integrating it into various aspects of the business, Thompson has helped set a new standard for customer service and efficiency. While his company resides in the property management sector, the company's use of AI exemplifies how technology can be leveraged to address common challenges in the manufacturing sector, resulting in improved customer satisfaction, enhanced employee productivity and substantial business growth.

Does Your Company Have an AI Game Plan?

In the rapidly evolving world of industrial manufacturing, staying ahead means embracing innovation. As AI continues to revolutionize the mid-market sector, companies without a strategic approach risk falling behind. Ask yourself: Is your company leveraging AI to its full potential? Are you optimizing supply chains, enhancing quality control and improving customer service with AI-driven insights? If not, now is the time to act.

Developing a comprehensive AI strategy involves more than just adopting new technologies. It's about integrating AI into your core business processes, aligning it with your company’s goals and ensuring it delivers measurable value. With AI, you can transform operations, manage risk more effectively and capitalize on new growth opportunities. The success stories shared at Cherry Bekaert's Modernizing Manufacturing Executive Symposium highlight how leading companies are already doing this and provide a roadmap for how you can start or refine your own company’s AI journey. 

With keen operational guidance and a long-standing dedication to the industry, Cherry Bekaert's Industrial Manufacturing team is ready to assist you in crafting a tailored strategy that not only meets today’s challenges but also positions your company for future success.

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Jason Hodell

Industrial Manufacturing & Consumer Goods Leader

Partner, Cherry Bekaert Advisory LLC

Contributor

Connect With Us

Jason Hodell headshot

Jason Hodell

Industrial Manufacturing & Consumer Goods Leader

Partner, Cherry Bekaert Advisory LLC