#27: Business Contracts Benchmarking, Optimal Fishing, and Free-of-Charge Electricity
Hello AI Pioneers! 🌅
Welcome to Issue #27 of Good AI Vibes. This edition is packed with insights showcasing how AI is not just a tool, but a game changer across various industries.
After a brief hiatus following our last issue, we took some time to recharge and conduct extensive research to bring you fresh and exciting use cases.
In this issue, we unfold the transformative impact of AI on:👇
📄 Precision in Paperwork: How AI Perfects Contract Management
🐟 AI in the Deep Blue: Crafting the Perfect Catch
⚡ Lighting Up Profits: AI’s Role in Power Surplus Management
Got a colleague who might find these insights enlightening? Don’t hesitate to share Good AI Vibes with them!
Now, let's jump into the details and discover how AI is creating waves of innovation across different sectors.
Precision in Paperwork: How AI Perfects Contract Management
What's the critical hurdle?
Imagine Ava, the Head of Legal at a sprawling corporation that juggles a myriad of contractors with contracts that frequently need renewing and updating. The major headache for Ava is ensuring that all contractual agreements are up-to-date and accurately reflect the latest terms, a vital requirement to prevent legal pitfalls and maintain operational harmony. Manually managing these contracts is not only time-consuming but also prone to errors, which can lead to disputes or financial losses. For example, if a contract fails to incorporate a crucial update on compliance regulations, it could expose the company to legal risks.
How was this initially tackled?
Initially, companies like Ava’s relied on traditional document management systems to handle contract versioning. These systems were designed to store and track changes in documents, allowing multiple users to access and update contracts as necessary. For instance, when a contract needed an update, the legal team would manually enter the changes, which the system would then save as a new version of the document.
Why did the initial approach fall short?
While this method provided a basic framework for version control, it had significant shortcomings. The manual entry of updates was labor-intensive and prone to human error. Moreover, as the volume of contracts increased, the traditional systems struggled to efficiently manage the growing complexity and ensure that all team members had the latest, most accurate information. This inefficiency often led to outdated versions of contracts being mistakenly used, causing confusion and potential legal issues.
How did AI revolutionize the solution?
Enter the power of AI, specifically through the use of Large Language Models (LLMs) that revolutionized how Ava’s team managed contract versions and benchmarking. The AI system was designed to automatically detect and integrate changes across all versions of a contract, ensuring that every team member had access to the most current document. Furthermore, it could compare new contract terms against industry benchmarks to provide insights on compliance and competitiveness. For instance, if a contract with a supplier was renewed, the AI could instantly update the terms across all related documents and alert the team if the pricing terms were not in line with market rates. This not only saved time but also dramatically reduced the risk of errors, ensuring legal accuracy and operational efficiency. Ava found that with AI, her team could handle a higher volume of contracts with greater precision, freeing up the legal team to focus on more strategic tasks rather than mundane version control.
Main reference: Good AI Vibes research.
AI in the Deep Blue: Crafting the Perfect Catch
What's the critical hurdle?
Imagine Kasper, the Head of Production at a large Norwegian offshore fish complex. Kasper faces a significant challenge: optimizing the fish production rate to match the volatile market demands and limited storage capacities. His complex must determine the right size and quantity of fish to produce, ensuring they align with consumer expectations—neither too large nor too small—while also considering the restrictions of their cooled storage facilities. This balancing act is crucial because failing to optimize can lead to overproduction, wasting valuable resources, or underproduction, missing potential market opportunities. For instance, if Kasper's complex produces too many large fish, which are not in high demand, they may end up with surplus stock that they cannot store or sell, leading to financial losses.
How was this initially tackled?
Previously, Kasper's complex tackled this issue using manual estimations and traditional production planning methods. They would assess past sales data, check storage availability, and then set production targets accordingly. This method involved a lot of guesswork and often relied on the experience and intuition of the staff. For example, if last year’s sales showed high demand for medium-sized fish during the spring, they would increase production of that size for the next spring, hoping the pattern held.
Why did the initial approach fall short?
The traditional approach often fell short due to its inherent inability to adapt to real-time market changes and predict future demands accurately. The reliance on historical data did not account for sudden shifts in consumer preferences or unexpected logistical challenges, such as a cooler malfunctioning, which could dramatically affect storage space. As a result, Kasper's complex frequently faced situations where the fish produced did not align with current market needs, either overshooting or undershooting demand.
How did AI revolutionize the solution?
AI revolutionized Kasper’s strategy by introducing a system that integrates real-time data on market demands, consumer preferences, and storage capacities to dynamically adjust production plans. This AI solution takes inputs such as current inventory levels, ongoing consumer purchase trends, and available storage space. It then processes this information to provide optimized production recommendations, such as the ideal quantity and size of fish to produce at any given time. For example, if the AI system detects an increasing trend in consumer preference for smaller fish and identifies that storage capacity will be limited in the upcoming weeks, it can immediately adjust the production to decrease the size and quantity of the fish produced. This not only ensures that the complex meets market demands accurately but also maximizes resource efficiency and reduces waste. The benefits of this AI-driven approach include a marked increase in production efficiency, better alignment with consumer demand, and significant reductions in unsold inventory, directly enhancing profitability.
Main reference: Good AI Vibes research.
Lighting Up Profits: AI’s Role in Power Surplus Management
What's the critical hurdle?
Imagine Helena, a Head of Customer Services at a new-generation digital utility company in the UK. Her primary challenge is managing customer satisfaction and operational costs during fluctuating energy supply. The specific problem arises during periods when there is an electricity surplus due to renewable energy overproduction. Helena's company tries to manage these surges by offering free electricity campaigns to encourage usage during surplus times. This helps stabilize the grid and avoids energy waste. However, accurately predicting these surplus periods is notoriously difficult. If Helena's team incorrectly forecasts these times, not only does the surplus go unused, but the company also incurs significant financial losses due to giving away electricity when it's actually needed, impacting both profitability and customer trust.
How was this initially tackled?
Before turning to more advanced solutions, Helena's company used basic forecasting and historical consumption data to estimate when they might have a surplus of energy to offer free electricity campaigns. They relied on trends from past years and general weather predictions to guess when there might be more wind or sun, leading to excess production. This approach was straightforward—monitor weather forecasts, align them with past consumption patterns, and plan free electricity offerings accordingly.
Why did the initial approach fall short?
The initial method of using basic historical data and general weather forecasts proved inadequate for a few reasons. First, weather is inherently unpredictable, and minor deviations in wind or solar intensity can significantly affect energy production. Additionally, the historical data did not account for rapid changes in consumer behavior or the increasing unpredictability of renewable energy outputs. As a result, Helena's company often faced situations where they offered free electricity without a real surplus, leading to financial losses, or missed opportunities to engage consumers during actual surplus periods, which could help in balancing the grid more effectively.
How did AI revolutionize the solution?
To address these challenges, Helena's team implemented an AI-driven solution that analyzes vast amounts of real-time data from various sources, including immediate weather reports, live energy production data, and real-time consumption patterns. This AI system can predict energy surpluses with much higher accuracy and almost in real-time. By processing this complex data, the AI helps Helena's company make more informed decisions about when to initiate free electricity campaigns. For example, if the AI detects an unexpected spike in solar production due to unforeseen sunny conditions, it can immediately trigger a campaign, notifying customers to increase their power usage, thus helping to balance the energy supply and demand more efficiently. The benefits of this solution are substantial, leading to better grid stability, reduced waste of renewable energy, and minimized financial risks, all while maintaining high customer satisfaction through more reliable and beneficial service offerings.
Main reference: Good AI Vibes research.
Good AI Vibes Cartoons 😅
In case you missed our last edition, catch up on all the insights from Good AI Vibes #26 right here!