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6 Key Use Cases Of AI In Supply Chain And Logistics

Technology has become a major driving force behind large-scale distribution, supply chain, and the smooth functioning of logistics. The use of AI in Supply Chain and logistics is helping businesses to improve the efficiency of their operations and speed of the products’ delivery, expand business and offer a better customer experience.

Hence, let us discuss the major advantages of welcoming AI in Supply Chain and logistics and present some of the relevant use cases of the solution.

What is AI in Supply Chain?

AI in Supply Chain and logistics is a broad term representing many different technologies and algorithms that are used to improve operations and increase efficiency. Considering the ongoing global supply chain challenges, AI is set to be an important part of the future of supply chain management.

From automation to predicting demand and supply trends to preparing the product supply and improving customer experience- AI is revolutionizing the supply chain and logistics sector.

What are the current challenges in the supply chain and logistics sector?

Artificial intelligence is offering unique and holistic solutions to supply chain and logistics companies helping them to overcome age-old challenges which are:

  1. One of the biggest challenges in logistics is that it’s a highly data-driven industry and requires supreme technology to make the right and quick decisions. Over the years, logistics businesses have been looking for a solution that can obtain, and analyse this large volume of data, to make better decisions.
  2. The second major challenge of supply chain and logistics is that it’s a highly seasonal business and product supply forecasts have always been a big risk. Understanding the product demands earlier and keeping everything streamlined is a great edge for logistics businesses.
  3. Managing multiple stakeholders is also a major challenge in supply chain and logistics. Businesses often look for an integrated solution to connect all the touchpoints and run the entire operation without any friction.

How are businesses solving conventional logistics problems using AI in supply chain and logistics?

The introduction of AI in the supply chain is helping large-scale businesses to look at their challenges with a fresh pair of eyes. Supply chain and logistics are now being transformed by Artificial Intelligence and here are the 6 use cases of it.

1.Effective planning of demand and supply logistics:

The success of the supply chain and logistics depends on smart planning of demand and supply. Businesses often fail to assess the right need and analyse the data to arrive at the right calculation. It creates a huge gap in delivery and paralyses the business reputation.

With the power of AI in supply chain and logistics, businesses can plan better and deliver on time. By analysing the data of tracking products, inventory levels, and sales, AI can give better predictions of supply and demand.

2. Successfully operating automated warehouses:

Managing a warehouse successfully is a common burden for all big logistics companies. With the power of AI, businesses finally can build a smart warehouse and leverage it.

So, what is a smart warehouse? It is a fully automated facility run by advanced artificial intelligence where most of the high-labour work is done through automation. With AI, inventory management and the data collection, sorting, and processing of goods become hassle-free.

3. Effective Route planning

Planning the right route is non-negotiable for faster and more accurate delivery. Logistics companies often struggle to identify the right route for hassle-free product delivery.

AI helps logistics companies to identify the best routes of the day and significantly minimise travel time for the transportation of goods from production facilities to final destination.

4. Better Location detection:

Location detection is one of the first use cases of AI in supply chain and logistics. It helps to detect the location of goods using different IoT technologies like GPS, cameras, barcodes, etc. This helps to find the best locations of goods while they are in transit throughout their journey from the production facility to the final destination.

5. Effortlessly automating back-office operations:

Running a supply chain and logistics company is a big responsibility. Businesses have to hire a large pool of individuals to manage a variety of jobs, such as-

  • Order fulfilment
  • Product cataloguing
  • Shipment load monitoring
  • Defect inspection
  • Quality control
  • Intrusion and theft detection
  • Occupancy detection in docks and parking lot
  • Distribution of logistics

With the power of AI, businesses can automate all the above tasks, replace manual labour with supreme technology, minimise human error possibilities and make the end-to-end operation faster and better.

6. Introduction of autonomous vehicles and other devices

One of the most fascinating use cases of artificial intelligence in supply chain and logistics. Managing a large fleet of vehicles is a serious headache for all logistics combined across the globe. From managing the cost to maintaining the trucks and hiring the best drivers, businesses often squander tons of money in maintaining their trucks and other vehicles.

Welcome AI-driven autonomous vehicles

It’s estimated that with the introduction of completely autonomous vehicles, it’s possible to bring down the operating costs to around 45%. On top of that, autonomous vehicles ensure better safety. AI uses a variety of technology to calculate what will happen next on the road and make the right driving decisions.

The power of AI is not limited to autonomous vehicles and extends to a suite of business-critical devices which logistics companies are now using to improve their operation.

The major advantages of AI in Supply Chain and Logistics

The above use cases highlight the potential of AI. It can be utilised in many different areas to give businesses breakthroughs like-

  • Predicting demand
  • Improving inventory management
  • Optimising shipping routes
  • Improving customer service
  • Fostering brand loyalty
  • Creating new revenue streams
  • Automating tedious tasks

The Future of AI in Supply Chain and Logistics

The future of AI in supply chain and logistics is optimistic. It has the potential to revolutionise how logistics companies operate and is now ready to be a major driver for the future of the industry. And here are the top two areas where AI is going to be a game changer.

  • Automation: AI can be used to help companies automate previously manual processes, like inventory management and routing.
  • Predictive analytics: AI can be used to analyse data in real-time, giving businesses a better idea of product trends, supply demands gap, better location, and route planning.

Final thoughts

Over the years, the ‘supply chain and logistics’ Industry has faced myriad challenges in streamlining operations, providing excellent customer service, and scaling up businesses.

AI has the potential to lead the industry in a new direction for a better outcome. In nutshell, it is evident that in future years, businesses will lean on AI to resolve the increasing requirement for efficiency at every stage of the production process and deliver the products faster to the doorstep of thousands of customers.

Also Read: Digital Warehouse: Technology At The Service Of Logistics

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