Professor Saravanan Kesavan worked in artificial intelligence (AI) before most people knew its name.
Over 20 years ago, he was a consultant implementing supply chain software for businesses. The first time he implemented planning software at a large semiconductor firm, four days went by before it yielded a solution to the problem he was addressing.
“It wasn’t called AI at all,” says Kesavan, professor of operations and Sarah Graham Kenan Scholar at UNC Kenan-Flagler Business School. “We used to call it decision-support tools.”
Soon, the solution took eight hours. Today, what once took eight hours can now be done in a few seconds.
Now algorithms are extremely sophisticated. Microprocessors are designed specifically to speed up machine learning algorithms. Big data just keeps getting bigger, and AI is intertwined in the fundamental fabric of not just Amazon and Google but big-box department stores and in an increasing number of organizations in different industries.
But while the number of businesses using AI technology has dramatically increased, one thing remains the same as it was at the beginning of Kesavan’s career.
While companies understand the importance of AI in optimizing performance and they’re investing heavily in the technology, many managers still struggle with how best to use data analytics and business solutions that come from machine learning.
An important question remains: How should companies actually work with AI?
“I’ve worked with large companies that continue to grapple with how to use AI effectively to make operational decisions,” says Kesavan. “They’re trying to figure out how to go about implementing it, how to train a workforce in AI and how to hire the right people to help with AI. The biggest challenge, though, might be the lack of awareness on how to restructure the processes to capitalize on the power of AI.”
With his latest initiative, Kesavan hopes to give companies answers.
Kesavan has launched the Rethinc. AI Management Lab at UNC Kenan-Flagler, housed within Rethinc. Labs at the Frank Hawkins Kenan Institute of Private Enterprise, thanks to a three-year, $150,000 gift from founding partner Advance Auto Parts.
The lab’s focus is research at the cross-section of AI and operations management, studying the most effective ways for a wide range of industries to implement AI more thoughtfully. It will explore AI’s role in such fundamental issues as sales forecasting, merchandise planning and employee scheduling.
“Our students will play an important role in shaping how AI is going to be adopted in organizations around the world,” says Kesavan. “They will be the ones leading the path of AI forward.”
If graduates enter the healthcare field, there will be an AI system that’s making decisions on doctor scheduling and patient services. If they enter retail, they will encounter AI systems that look at how much inventory to order and suggest pricing.
Companies rely on the next generation of business students to help them understand the full potential of AI and find new ways to implement it successfully.
“The lab is going to help us conduct cutting-edge work on problems many companies share,” says Kesavan. “AI is absolutely critical, but managers have been naturally skeptical because they tend to make decisions on intuition.
“For them, it has long been about the art, rather than the science, of decision making. AI shifts it to the far end of the science of decision-making.”