How Can AI Help in Enhancing Supply Chain Management?

Updated on Jan 8th, 2024

How Can AI Help in Enhancing Supply Chain Management?

These days, Technological innovations and Artificial Intelligence like Deep learning, NLP (Natural language processing), and machine learning are being implemented by businesses and startups across multiple industries. These innovations are progressively becoming the focus of our daily lives without any of us realizing it. One of the significant examples is Artificial Intelligence that has become the most important and useful technology in different sectors right from healthcare to the supply chain industry.

Here in this blog, we will talk about how AI can put a significant impact on supply chain management.

What is a Supply Chain?

Put, it is a set sequence of procedures involved in bringing the consumer a product or service. A business and its suppliers are often networked to manufacture and sell a particular commodity to the final customer; this network encompasses numerous operations, persons, organizations, and resources. Not only that, but the supply chain reflects the steps required to deliver the product or service to the consumer from their original location.

In general, these steps involve transferring and converting raw material into finished goods and shipping those finished goods and selling them to target consumers. The participating organizations include manufacturers, suppliers, distributors, transport firms, fulfillment centers, and retailers.

According to Mckinsey, 61% of the executive’s reports decreased manufacturing cost, and more than 50% of reports state increased revenue from introducing Artificial Intelligence in their supply chain.

If you own a supply chain business and want to know what AI brings to your business, then stick to the end. So without any further due, let’s get started.

AI in Supply Chain

It often has been a concern for conventional supply chain organizations to do this, since they concentrate mainly on maximizing a single portion of the supply chain, instead of maximizing the whole supply chain. This restricts their operating efficiency to satisfy the need for specificity in the unique preferences of the consumers. Artificial Intelligence is transforming the supply chain and logistics industry.

It comes with computational techniques that help pick vast volumes of data from supply chain collection. You may use these techniques and evaluate them to produce information that will trigger processes and complex functions. Many businesses worldwide assume that supply chain automation can provide a competitive advantage, as AI technologies can solve stock planning, supply network planning production, and distribution planning.

Many companies believe that AI technologies provide optimum solutions to solving problems like stock monitoring, warehouse monitoring, automated inventory control, quality assurance, elimination of faulty goods, and many more.

As per PricewaterhouseCoopers’ report, Artificial Intelligence will contribute nearly 15 trillion dollars by the year 2030. AI took up the space to address the void in supply chain management and ensure efficient business continuity. AI applications in supply chain management improve efficiency and increase business productivity.

In the upcoming section, we will discuss some benefits of AI in supply chain management. So without further due, let’s get straight onto the point.

Benefits of Artificial Intelligence in Supply Chain Management

Benefits of Artificial Intelligence in Supply Chain Management

1. Absolute Mobility

With today’s dynamic supply chain network, it’s vital for producers to get greater visibility of the overall supply chain, with relatively little hassle. An integrated conceptual Artificial Intelligence-driven platform provides a single virtualized data layer to reveal the correlation and effect, remove constraints operations, and identify possibilities to enhance all these with real-time data rather than outdated records.

2. Smart Decision Making Process

Using cognitive forecast and feedback on optimal behavior, Artificial Intelligence-driven supply chain management application exacerbates crucial decisions, which helps increase the supply chain’s overall efficiency. Thus, it allows firms with potential consequences in efforts, time, expense, and turnover across different sectors. It also consistently builds on these guidelines by acquiring knowledge over time, as subjective circumstances change.

3. Short-run Delivery and Migrates Risk 

In the current business world, despite the challenging operations and massive documentation data analysts need to handle. Empowering Artificial Intelligence will understand, and enhanced data analysis will alleviate complicated and time-taken processes via GPS data and advanced connected sensors; it can monitor product positions during the delivery process. Also, Artificial Intelligence can accurately direct driverless cars to shorten the entire delivery process.

4. Removes Risk

Processes for the supply chain management were only ever successful when the stock is well handled. If the provider fails to fulfill the market request, the time and resources will go futile, and the consumers will leave disappointed. With the assistance of regards, AI reduces these risks. It can forecast future product demand and add clarity to the whole chain and enhance its strategic thinking.

5. Step-up Productivity

Artificial Intelligence offers performance analysis in supply chain management and forecasts new problems and challenges in the same field. It uses different technologies, like supervised and unsupervised learning, including simulated annealing, to assess supply chain problems. These experiences have given rise to help reduce time-consuming tasks and enhance operational efficiency.

6. Perspective Analytics

To make timely decisions that meet demands with pace and flexibility, many businesses today lack crucial meaningful data. Automated testing that uses AI’s power has had the potential to wade vast quantities of dispersed data to identify trends and measure considerations on a scale far better than traditional systems can.

7. Better Warehouse Management

The Warehouse seems to be the hub for supply chain operations. If there is indeed a void here, companies and manufacturers may lose critical opportunities to generate sales and revenues. Artificial Intelligence-driven warehouse operations utilize advanced supply chain management technology to automate methods, accelerate operations, and reduce dependency on manual activities throughout the whole supply chain process.

Considering the benefits, here are the handpicked ways in which Artificial Intelligence is enhancing supply chain management

1. Use of AI in Sourcing

The assessment of sourcing is the most important in the whole supply chain. Before creating the supply chain, it includes identifying various manufacturers, labeling their locations, testing the raw materials’ quality, and cost agreements. The sourcing of raw material is seen as a crucial phase in supply chain management. Under that, you can source goods from abroad and incorporate them into your finished goods to reduce operating and production costs while maintaining a low cost of transport. But natural, financial, and political factors may influence those decisions, and the overall price will adjust accordingly. This condition demand AI to interfere. 

You can compare various vendors from historical data with AI-driven systems and provide the scores. You may give them a credit score based on reviews and scores and finalize the conclusion on whether to purchase it from internal or external vendors or outsource the operations.

2. AI in Demand Forecasting and Data Analytics

It’s essential to interpret the essentials amounts of data produced by sensors to portray the world today and make wise and effective decisions. Businesses indeed incur losses as demand for stock stutters. The analytical abilities of AI help in network configurations and the need for predictions. That enables salespeople to become much more strategic. They can change the number of operating vehicles by knowing in advance, and guide them to areas where high-demand is anticipated. This results in lower operating costs. 

The potential of Big Data helps companies to smoother and more vital than ever to predict reasonably precise viewpoints and maximize future efficiency. Big Data analytics enable predictions and advanced contingency analytics, and this allows accurate capacity sourcing and supply chain so that shipments can be optimized.

3. AI Chatbots for Better Customer Service

AI Based Chatbots

A chatbot is the cornerstone of modern-day contact with customers. The availability of 24*7, in general, makes it obligatory to use for the handling of inquiries. It makes the website attractive for the delivery companies. Today, a chatbot can manage all the delivery confirmation-related queries. It operates based on preprogrammed, system-set questions. 

According to the accentor, over 80% of customer queries are resolved through chatbots. It will serve as a mediator between your customer and the shipping company as it encounters difficult questions. For instance, Amazon Alexa provides faster support query resolving. Users may inquire about the delivery schedule directly through Amazon’s smart device, eliminating their time finding solutions.

4. AI Robots

No discussion is full-on AI without considering the robotics area. Although they may seem like a groundbreaking or futuristic idea, they are already integrated within the supply chain. According to research done by Tractica, states that the sale of logistics robots for smart warehousing is predicted to reach 22 billion dollars by the year 2021. Many warehouses whose operational standards of human beings would no longer grasp since AI controls them. In general, their storage coefficient is robots, and most especially AGV (Automated guided vehicles). In the warehouse, goods in what seems to be a disorderly manner are packed in various racks and shelves. 

The automated systems and robots have no problem with what would require excessive travel and extraction time for a human muncher. When an order is issued, the first accessible robot pulls up an object nearest to its location and transmits it to the human workforce at the store’s edge or warehouse.

5. AI Algorithms and Vehicles

The primary thing that AI brings to the supply chain is AGV (Automated guided vehicles). It may take a while to get driverless trucks, but the logistics industry is now using high-tech driving to boost performance and reliability. In this sector, significant change is required in assisted stabilization, lane-assist, and autopilot on the highway. Stronger-driving solutions are coming ahead to accomplish lower fuel consumption and operate on putting together numerous trucks to provide deployments, smart computers often monitor such structures, and they are also linked to each other. 

Each mile and minutes count in the supply chain; you can use a genetic-algorithm based route planner for dynamic distribution routes. You can use AI-powered GPS tools for timely and cost-effective deliveries; depending on traffic patterns and other variables, courses may be planned and optimized. Doing so will help you to save unnecessary costs incurred on unwarranted concerns.


AI will initiate a different level of quality over the supply chain operations in the coming years. The world and technology are increasingly evolving and creating a new standard in handling data, operating functions, and service customers efficiently, automated, and smarter. The above five impacts are groundbreaking. And in the coming years, AI will continue to deliver new edge-cutting technology advancements to startups, businesses, and companies.

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Matellio is a modern digital technology leading company that provides innovative and emerging solutions to businesses, companies, and startups across different industries worldwide. Our collection of digital services and solutions helps supply chain, logistics, and transport companies increase operating efficiency and change their working way. We make digital transformation simpler for leading firms.

For more information, visit our website

Till then, happy reading.

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