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Unlocking Efficiency: Exploring Generative AI and Its Impact on Operations Excellence

Generative artificial intelligence (AI) describes algorithms (such as ChatGPT) that can be used to create new content, including audio, code, images, text, simulations, and videos - and what about industrial use cases? Recent breakthroughs in the field have the potential to drastically change the way we approach operations excellence. In this post we will introduce you to what is ahead of use, along with already existing industrial applications.


Unlocking Efficiency: Exploring Generative AI and Its Impact on Operations Excellence
Gen AI for Operations Excellence

In the months and years since ChatGPT burst on the scene in November 2022, generative AI (gen AI) has come a long way. Every month sees the launch of new tools, rules, or iterative technological advancements. While many have reacted to ChatGPT (and AI and machine learning more broadly) with fear, machine learning clearly has the potential for good. In the years since its wide deployment, machine learning has demonstrated impact in a number of industries, accomplishing things like medical imaging analysis and high-resolution weather forecasts.


A 2022 McKinsey survey showed that AI adoption has more than doubled over the past five years, and investment in AI is increasing apace. It’s clear that generative AI tools like ChatGPT (the GPT stands for generative pretrained transformer) and image generator DALL-E (its name a mashup of the surrealist artist Salvador Dalí and the lovable Pixar robot WALL-E) have the potential to change how a range of jobs are performed. The full scope of that impact, though, is still unknown—as are the risks.


Still, organizations of all stripes have raced to incorporate gen AI tools into their business models, looking to capture a piece of a sizable prize. McKinsey research indicates that gen AI applications stand to add up to $4.4 trillion to the global economy—annually. Indeed, it seems possible that within the next three years, anything in the technology, media, and telecommunications space not connected to AI will be considered obsolete or ineffective.


But before all that value can be raked in, we need to get a few things straight: What is gen AI, how was it developed, and what does it mean for people and organizations?


What’s the difference between machine learning and artificial intelligence?

Artificial intelligence is pretty much just what it sounds like—the practice of getting machines to mimic human intelligence to perform tasks. You’ve probably interacted with AI even if you don’t realize it—voice assistants like Siri and Alexa are founded on AI technology, as are customer service chatbots that pop up to help you navigate websites.


Machine learning is a type of artificial intelligence. Through machine learning, practitioners develop artificial intelligence through models that can “learn” from data patterns without human direction. The unmanageably huge volume and complexity of data (unmanageable by humans, anyway) that is now being generated has increased machine learning’s potential, as well as the need for it.


What are the main types of machine learning models?

Machine learning is founded on a number of building blocks, starting with classical statistical techniques developed between the 18th and 20th centuries for small data sets. In the 1930s and 1940s, the pioneers of computing—including theoretical mathematician Alan Turing—began working on the basic techniques for machine learning. But these techniques were limited to laboratories until the late 1970s, when scientists first developed computers powerful enough to mount them.


Until recently, machine learning was largely limited to predictive models, used to observe and classify patterns in content. For example, a classic machine learning problem is to start with an image or several images of, say, adorable cats. The program would then identify patterns among the images, and then scrutinize random images for ones that would match the adorable cat pattern. Generative AI was a breakthrough. Rather than simply perceive and classify a photo of a cat, machine learning is now able to create an image or text description of a cat on demand.


What does it take to build a generative AI model?

Building a generative AI model has for the most part been a major undertaking, to the extent that only a few well-resourced tech heavyweights have made an attempt. OpenAI, the company behind ChatGPT, former GPT models, and DALL-E, has billions in funding from bold-face-name donors. DeepMind is a subsidiary of Alphabet, the parent company of Google, and even Meta has dipped a toe into the generative AI model pool with its Make-A-Video product. These companies employ some of the world’s best computer scientists and engineers.


But it’s not just talent. When you’re asking a model to train using nearly the entire internet, it’s going to cost you. OpenAI hasn’t released exact costs, but estimates indicate that GPT-3 was trained on around 45 terabytes of text data—that’s about one million feet of bookshelf space, or a quarter of the entire Library of Congress—at an estimated cost of several million dollars. These aren’t resources your garden-variety start-up can access.

What kinds of output can a generative AI model produce?


As you may have noticed above, outputs from generative AI models can be indistinguishable from human-generated content, or they can seem a little uncanny. The results depend on the quality of the model—as we’ve seen, ChatGPT’s outputs so far appear superior to those of its predecessors—and the match between the model and the use case, or input.


ChatGPT can produce what one commentator called a “solid A-” essay comparing theories of nationalism from Benedict Anderson and Ernest Gellner—in ten seconds. It also produced an already famous passage describing how to remove a peanut butter sandwich from a VCR in the style of the King James Bible. Image generating AI models like DALL-E 2 can create strange, beautiful images on demand, like a Raphael painting of a Madonna and child, eating pizza. Other generative AI models can produce code, video, audio, or business simulations.


But the outputs aren’t always accurate—or appropriate. When Priya Krishna asked DALL-E 2 to come up with an image for Thanksgiving dinner, it produced a scene where the turkey was garnished with whole limes, set next to a bowl of what appeared to be guacamole. For its part, ChatGPT seems to have trouble counting, or solving basic algebra problems—or, indeed, overcoming the sexist and racist bias that lurks in the undercurrents of the internet and society more broadly.


Generative AI outputs are carefully calibrated combinations of the data used to train the algorithms. Because the amount of data used to train these algorithms is so incredibly massive—as noted, GPT-3 was trained on 45 terabytes of text data—the models can appear to be “creative” when producing outputs. What’s more, the models usually have random elements, which means they can produce a variety of outputs from one input request—making them seem even more lifelike.


What kinds of problems can a generative AI model solve?

The opportunity for businesses is clear. Generative AI tools can produce a wide variety of credible writing in seconds, then respond to criticism to make the writing more fit for purpose. This has implications for a wide variety of industries, from IT and software organizations that can benefit from the instantaneous, largely correct code generated by AI models to organizations in need of marketing copy. In short, any organization that needs to produce clear written materials potentially stands to benefit. Organizations can also use generative AI to create more technical materials, such as higher-resolution versions of medical images. And with the time and resources saved here, organizations can pursue new business opportunities and the chance to create more value.


We’ve seen that developing a generative AI model is so resource intensive that it is out of the question for all but the biggest and best-resourced companies. Companies looking to put generative AI to work have the option to either use generative AI out of the box, or fine-tune them to perform a specific task. If you need to prepare slides according to a specific style, for example, you could ask the model to “learn” how headlines are normally written based on the data in the slides, then feed it slide data and ask it to write appropriate headlines.


What are the limitations of AI models? How can these potentially be overcome?

Because they are so new, we have yet to see the long tail effect of generative AI models. This means there are some inherent risks involved in using them—some known and some unknown.


The outputs generative AI models produce may often sound extremely convincing. This is by design. But sometimes the information they generate is just plain wrong. Worse, sometimes it’s biased (because it’s built on the gender, racial, and myriad other biases of the internet and society more generally) and can be manipulated to enable unethical or criminal activity. For example, ChatGPT won’t give you instructions on how to hotwire a car, but if you say you need to hotwire a car to save a baby, the algorithm is happy to comply. Organizations that rely on generative AI models should reckon with reputational and legal risks involved in unintentionally publishing biased, offensive, or copyrighted content.


These risks can be mitigated, however, in a few ways. For one, it’s crucial to carefully select the initial data used to train these models to avoid including toxic or biased content. Next, rather than employing an off-the-shelf generative AI model, organizations could consider using smaller, specialized models. Organizations with more resources could also customize a general model based on their own data to fit their needs and minimize biases. Organizations should also keep a human in the loop (that is, to make sure a real human checks the output of a generative AI model before it is published or used) and avoid using generative AI models for critical decisions, such as those involving significant resources or human welfare.


It can’t be emphasized enough that this is a new field. The landscape of risks and opportunities is likely to change rapidly in coming weeks, months, and years. New use cases are being tested monthly, and new models are likely to be developed in the coming years. As generative AI becomes increasingly, and seamlessly, incorporated into business, society, and our personal lives, we can also expect a new regulatory climate to take shape. As organizations begin experimenting—and creating value—with these tools, leaders will do well to keep a finger on the pulse of regulation and risk.


Impact of Gen AI and the Business Focus

With the emergence of Generation AI (Gen AI), Lean-IQ finds itself at the forefront of adapting to new market dynamics and technological advancements. Gen AI, representing the generation born into a world where artificial intelligence is ubiquitous, brings with it a set of unique challenges and opportunities for businesses operating in various industries.


Adapting Lean Principles to Gen AI

Lean-IQ's traditional focus on optimizing processes and minimizing waste aligns well with the goals of Gen AI, which seeks efficiency and automation in all aspects of operations. By leveraging AI-powered solutions, Lean-IQ can further streamline its processes and enhance its ability to deliver value to clients - that will be a new level of Operations Excellence!


Industrial Use Cases

  • Predictive Maintenance in Manufacturing: Gen AI enables Lean-IQ to implement predictive maintenance solutions using advanced machine learning algorithms. By analyzing real-time data from sensors installed in machinery, Lean-IQ can predict equipment failures before they occur, thus minimizing downtime and reducing maintenance costs for manufacturing clients.

  • Supply Chain Optimization: With Gen AI, Lean-IQ can optimize supply chain operations by harnessing the power of predictive analytics. By analyzing historical data and market trends, Lean-IQ can forecast demand more accurately, optimize inventory levels, and identify potential bottlenecks in the supply chain, enabling clients to operate more efficiently and cost-effectively.

  • Quality Control in Automotive Manufacturing: In the automotive industry, Gen AI enables Lean-IQ to enhance quality control processes using computer vision and image recognition technologies. By automatically inspecting components for defects during the manufacturing process, Lean-IQ can ensure that only high-quality products reach the market, thereby enhancing customer satisfaction and brand reputation.


 

As Gen AI continues to evolve, Lean-IQ remains committed to staying at the forefront of innovation and leveraging cutting-edge technologies to drive business growth. By embracing Gen AI and its transformative potential, Lean-IQ is well-positioned to not only adapt to changing market dynamics but also lead the way in shaping the future of lean management in the digital age.

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