Artificial intelligence is moving beyond software and further into the physical side of business. Companies in food production and logistics are starting to use data systems to support day-to-day decisions, not long-term planning.
That change is visible in The Hershey Company’s latest strategy update. At its Investor Day, the company said it plans to use AI in its operations, from sourcing analytics to plant automation and fulfilment, with a focus on how the business runs behind the scenes.
Hershey said it plans to apply AI to sourcing and fulfilment. This includes using data to guide how ingredients are bought and how products are distributed. In its Investor Day material, the company said it aims to build “a faster, smarter and more resilient supply chain powered by automation and AI-enabled decision making”.
Supply chains in food and snack markets are under steady pressure: Costs can change quickly, demand can change by season, by market, or by product category, and retailers still expect goods to arrive on time and in the right mix.
Hershey said its digital planning tools are meant to connect different parts of the business. The company said those systems are designed to reduce waste and improve inventory levels. It also said digital operational planning can connect data in the supply chain and help raise service levels.
From reporting to action
Part of Hershey’s update is its use of the phrase “AI-enabled decision-making.” The company said its approach will link sourcing and delivery more closely and plans to use automated fulfilment systems for custom assortments and to improve speed to market.
This is a useful way to read strategy. A hard task is turning data into decisions that help operations move faster or with fewer mistakes.
This is where AI is starting to play a bigger role, according to Hershey’s. The value comes from how operations are connected.
AI in the supply chain and plant operations
The changes also extend into manufacturing. Hershey said it will increase plant automation to improve manufacturing efficiency and use AI in more parts of its operating model. What is changing is how AI fits into those systems. Instead of sitting apart from production, it is being positioned as part of the process used to guide planning and support execution.
That may help companies improve planning and respond more quickly when conditions change. In a business where input costs and consumer demand can change often, even small gains in timing can matter.
Food and snack companies deal with constant swings in input costs and demand. Ingredients like cocoa and sugar are affected by weather, trade flows, and supply issues. Companies still have to keep factories running and products moving through retail channels.
Hershey’s plan to use sourcing analytics is one example of how AI may be applied in that setting. By analysing supplier data and market trends, the company may improve how it buys raw materials and manages risk. The company also said it wants to better connect workers in its operations. That suggests the strategy is not only about automation. It is also about coordination in the business.
Hershey said it plans to “incorporate AI in every stage of its operations,” including sourcing analytics and worker connectivity, as well as automated fulfilment and plant automation.
That makes the company a useful case study for a wider change in enterprise AI. Firms are moving away from narrow pilots and toward broader use in business functions. In that model, AI is treated as a part of supply and delivery systems.
CEO Kirk Tanner framed the plan around growth and execution, saying, “The strategy is clear. The team is ready. The next chapter of growth and leading performance starts now”.
Where this may lead
The kind of change is likely to spread as more companies look for ways to connect data with operational decisions. Hershey’s strategy shows how AI is starting to take a larger role in industries built on physical goods. The technology may sit in the background, but its role in daily operations is becoming harder to ignore.
(Photo by Janne Simoes)
See also: JPMorgan begins tracking how employees use AI at work
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