
Artificial intelligence has gained a lot of popularity these days as it is a technology that applies to advanced analysis and logic-based techniques. The machine learning plan includes interpreting events, supporting and automating decisions, and taking actions. The buzz is mainly due to skilled labour shortages and the ever-changing demands of the customers. AI has gained momentum quickly in supply chain management because of its knack for managing repetitive and mundane jobs and freeing up employees to concentrate on essential things. As per a recent survey, it was concluded that AI has already revamping the operational process and facilitating budget-friendly supply chain solutions.
Artificial intelligence (AI) is a technology that enables machines, software, and systems to emulate a variety of types of human intelligence and behaviour. AI is mainly based on systems which use “intelligent agents” and challenging algorithms to determine information, perform tasks, and meet the altering inputs and environments. To help you gain insights, products, services, or efficiencies, AI mainly uses human reasoning as a model when it comes to decision making.
Machine learning, language processing naturally, planning, problem-solving, and robotics are several types of AI. Artificial intelligence has many applications in the supply chain, and it includes getting information, data analysis, planning of supply and demand, autonomous vehicles, and warehouse management.
How is artificial intelligence related to the supply chain?
When it comes to optimizing the modern supply chain, AI plays several critical roles. Additionally, AI use cases are enhancing all the time, and it claims to deliver real value for the supply chain management.
- Get Important Data from Customers, Suppliers, and Documents- Natural language processing (NLP) is a technology that uses human language and gets insight through AI. The method is most likely to go through supply chain contracts, make orders, chat logs with clients or vendors, and other documents to determine the common themes or issues. You can use the feedback to make the most of SCM as part of continous betterment.
- Manage the Supply, Demand, and Inventory Management- Another aspect of AI is machine learning, which can determine complex data to get the current patterns and future trends, then make decisions depending on the outcomes. The best part about machine learning is that it helps in managing the flow of goods throughout the supply chain, and it ensures that raw materials and products are not only in the right place but also at the right time.
- Before the products are needed, it will forecast the demand- AI can do both sources and process data from a plethora of areas and forecast future demand depending on external factors. This considers the supply and demand planning along with product development.
- Optimize Warehouse Management and Logistics- Warehouses are not only busy but also have an ever-changing environment. AI can determine the warehouse processes and streamline everything from sending, receiving, storing, picking to the management of individual products. It can also understand the fleet performance and ensure that the perfect distribution channels get goods to retailers and other clients at the perfect time.
- Automate Vehicles in Distribution Centres and Various Logistics Operations- AI can also have some dominance with autonomous vehicles amid distribution areas along with optimizingthe operations of the warehouse. Often vast facilities make use of robotic cars and tools to do both store and pick stuff, and they can also consider the most efficient solutions with the help of AI.
Benefits of AI in the Supply Chain:
- Correct inventory management: The proper inventory management can make sure the right flow of items in and out of the warehouse. Ideally, there is a plethora of inventory-related variables, including order processing, picking, and packing, and it can be quite time-consuming with a high tendency for error. Besides that, if inventory management can help in preventing overstocking, insufficient stock, and unexpected stock-outs. AI-driven tools can prove to be highly effective in inventory management thanks to their ability to handle mass data. The best part about these intelligent systems is that they can quickly analyse and interpret massive datasets, offering exceptional guidance when forecasting demand and supply. The AI systems can help you predict and discover the new habits of the consumer and forecast seasonal demand.
- The warehouse’s efficiency: When it comes to the time of an element from a warehouse and assure an easy journey to the customer, an efficient warehouse is a crucial part of the supply chain, and automation can makethe same. AI systems can easily get a solution to a plethora of warehouse issues that which are rapidly and accurately as compared to humans can and make the challenging procedures easy and make the work quick.
- Better safety: The AI-based tools are automated, which claims to offer smarter planning and efficient warehouse management, improving worker and material safety. AI can also understand the safety of the entire workplace and keep the manufacturers informed about any potential risks. With the needed feedback loops and proactive maintenance. It helps manufacturers react quickly and decisively to keep warehouses safe and also meet the safety standards.
- The minimum cost of operations: It is a massive benefit of AI systems for the supply chain. Be it customer service to the warehouse or automated intelligent operations, and everything works without any error, which reduces the number of mistakes and workplace incidents. These warehouse robots offer fantastic speed and accuracy when it comes to achieving higher levels of productivity.
- Delivery on time: The entire process is made faster, safer and smarter. It helps in facilitating the prefect delivery on time to the customer as per the commitment. The best part about Automated systems is that it increases traditional warehouse procedures, eradicating the operational bottlenecks besides the value chain with minimum effort to get the delivery targets.
- Accelerating the planning and scheduling activities: Often, the supply chain experts find it challenging to establish an end-to-end process to plan for profitable supply network accounting. This task is often more convoluted due to a visibility on the already remaining portfolios because of the unplanned events or transportation issues. These elements can be defined using multiple characteristics that take a range of values in different supply chain industries. The bottlenecks play a crucial role, as supply chain managers use this to make multiple effective decisions, by implementing AI in supply chain and logistics.
- Intelligent Decision-Making: Using cognitive predictions and recommendations on optimal actions, AI-led supply chain optimization software amplifies essential decisions. It helps in improving the overall supply chain performance. In terms of time, cost, and revenue, it also allows to take an action in spite of difficult situations.
How can you have your supply chain ready for AI?
- Set realistic expectations- Before committing to AI implementation, every organization must conduct a self-awareness test. Decide about these integrations might help you achieve if you haven’t had discussions formally with regards to latesttechnology integrations.
- Understand how the company uses the technology as of now- You need to understand where your organization stands after learning to generate from AI under the from a deeper point of view. The assessment must concentrateon three things like the people, skills, and tools. After examining your current technology stack, you need to have an open discussion about the same with the shareholders.
Wrap up:
Hence, it Is clear that supply role does play a crucial part in the working of the company and when mixed with AI, it can do wonders. Chain executives don’t have much time and have a plethora of meetings to attend, so implementation is a burden they can’t afford. The best part about AI tools is that they offer actionable insights. Even though you might feel that implementing AI is quite challenging, it is not realistic because supply chain companies need more execution than analysis. You can quickly implement AI once you understand its basics. Also, if you get some alternatives, you can implement AI in cost-effective ways.
Written By : Dr. Rohit Singh

Designation : Assistant Professor – Operations
Chairperson – Placement & Corporate Relations and Student Relations
He has obtained his bachelor’s degree in Mechanical Engineering followed by his Master’s degree in business administration and Ph.D. in the area of supply chain management from the Indian Institute of Information Technology, Gwalior. He is actively involved in research and has published 30 papers in journals of international repute and also presented papers and chaired sessions at international and national conferences.