The last few years have witnessed Artificial Intelligence (AI) roaring out of tech labs to become an everyday part of our lives, without people even realizing it. Apart from powering numerous applications and many digital products, artificial intelligence is here to benefit all the industries, including logistics and supply chain.
Lots and lots of companies are benefiting from investing in artificial intelligence technology. Supply chain and operations are one of the top areas where businesses are driving revenue via investing in artificial intelligence. Large volumes of data in supply chain and logistics require sophisticated processing solutions. Companies are now turning towards adopting artificial intelligence powered techniques like machine learning (ML), deep learning and natural language processing (NLP). All these techniques make it easier to analyze massive volumes of data in an efficient manner and provide an in-depth analysis, also help perform many other complex functions. The ever-increasing data is not the only part which contributes to the development of artificial intelligence. There are various other factors which drive this trend, including speed and power, algorithmic advancements etc.
Algorithmic advancements have improved significantly in the recent years which has allowed the detection of patterns, discover of correlations which were next to impossible for humans to find via conventional technology alone. For instance, smart algorithms can give valuable insights such as the number of vehicles available for delivery, helping customers to know the price and approximate time of delivery among others.
Let us now understand how artificial intelligence is impacting the supply chain as a whole.
The adoption of artificial intelligence technologies like machine learning help to provide new and in-depth insights into a wide platter of arenas which includes logistics, warehouse management, inventory control, collaboration, and supply chain management. Artificial intelligence allows greater contextual intelligence. Artificial intelligence powered visual inspection takes pictures of cargo using special cameras which helps to identify damage and take appropriate corrective action.
Artificial intelligence provides for an unmatched analysis into the supply chain management performance which can help to determine factors which are affecting that performance. AI use the powerful capabilities of technologies encompassing supervised learning, unsupervised learning, and reinforcement learning. This helps to identify factors and problems which impact the performance of the supply chain. For instance, supervised learning helps to detect fraud and make informed decisions, reinforcement learning can take a real-time decision by providing relevant and useful data. IBM’s Watson is one such example where Artificial intelligence is used to boost insights and productivity in the supply chain management.
In the early days, less advanced technologies were unable to deliver value since those technologies didn’t take into account a wide variety of factors such as consumer attributes on the demand side. Today, AI enables the measurement and tracking of all factors which are a prerequisite to improve demand forecasting accuracy. It analyses enormous volumes of data and forecasts which is continuously adjusted based on real-time sales, weather and other external factors. Amazon has pioneered in this area with its highly automated distribution centers. Artificial intelligence helps in analyzing supplier related data such as delivery performance, evaluations, audits, credit scoring and hence provide information for future use. This increases the effectiveness of supplier relationship management and improves its customer service.
Before the arrival of next-generation technologies such as machine learning, businesses didn’t have tools to enhance their production planning and scheduling accuracy. The advent of artificial intelligence has enabled businesses to analyze a range of constraints and also optimize them. Businesses can leverage artificial intelligence technologies to reduce supply chain latency for parts which are used in highly customized products or the products which are popular. AI will also help in predicting the demand and optimize the flow of some critical parts to ensure a smooth moving of production units.
Artificial technology plays a crucial role in an advanced supply chain and logistics solutions which boost effectiveness, efficiency and automates tasks for supply chain planners and managers. AI could be a deciding factor across industries which will determine supply chain superiority, drive customer experience and satisfaction. In the coming years, artificial intelligence technology will drive more and more sophisticated solutions in the supply chain to speed and improve the delivery of products and services to its customers. Businesses need to keep a close on artificial intelligence powered solutions to thrive and excel in a dynamic and competitive environment.