With an ever-increasing demand for products, the supply chain industry finds itself regularly having to innovate in order to efficiently keep up with rising customer desires. Advancements like AI have revolutionized how businesses tackle their logistics and distribution operations, allowing them to make informed decisions based on data-driven insights
It’s no surprise, given that only 4% of supply chain leaders believe their operations are future ready. Jeff White Founder and CEO of Gravy Analytics sums it up well when he says: “Ongoing supply chain disruption means AI-driven business intelligence has never been more important” reported by Accenture.
We can certainly see why, too – Mckinsey reported that early adopters of AI in supply chain management saw a decrease in logistics costs of 15%, proving its effectiveness in increasing efficiency and cost savings. Getting on board with AI in the supply chain before it becomes the norm might just be the competitive advantage your business needs.
AI in Supply Chain Statistics
- Implementing AI in the supply chain will lower: Errors in future predictions by 20–50%, Sales Losses by 65%, and Overstocking of Inventories by 20–50%.
- Early AI adopters in supply chain management reported 15% lower logistics costs, 35% higher inventory levels, and 65% higher service levels.
- By 2028, the market for AI in supply chains is expected to reach USD 20 billion and grow at a CAGR of 20.5%.
Sources: (McKinsey, BlueWeave Consulting and Research)
AI In Supply Chain Market
According to Bluewave Consulting, Artificial Intelligence is taking the supply chain market by storm. By 2028, the global market for AI in the supply chain industry is expected to reach more than $20 billion USD, with a compound annual growth rate of 20.5%.
This remarkable growth speaks to the increasing importance of AI for streamlining business processes for better efficiency and customer satisfaction across many sectors.
With its innovative technological advancements, AI promises to revolutionize the supply chain economy and greatly improve operations throughout an organization.
AI In Supply Chain Examples
With the rise of artificial intelligence in the supply chain, businesses are benefiting from various advantages. Here are some ways AI is used in the supply chain.
- Autonomous transport
- Final-mile delivery route efficiency
- AI Insights Are Making Loading Processes More Profitable And Efficient
- Demand Prediction Helps Manage Warehouse Supply And Demand Better
Businesses can use AI in the supply chain to efficiently speed up operations while making educated decisions based on insightful data.
How is AI used in the supply chain?
AI has revolutionized the supply chain in many ways. With its predictive analytics, AI can help plan capacity accurately, forecast demand more effectively, and improve productivity with fewer resources.
On top of that, it can save costs and boost output – giving businesses a competitive edge over their competitors. At the same time, AI can be used to identify bottlenecks and trends in production, labor, and pricing that can be leveraged to reduce costs and generate more revenue according to Appinventiv.
All in all, AI is helping streamline the entire supply chain process while increasing efficiency simultaneously.
Future of AI In Supply Chain
Artificial Intelligence is revolutionizing the supply chain by helping businesses make informed decisions quickly and easily.
AI enables companies to predict a range of unexpected events, such as weather conditions, transportation bottlenecks, and labor strikes which can disrupt supplies and cause disruption in deliveries to customers according to Rohit Tandon, managing director and global AI & analytics services leader at Deloitte, told CNBC.
The ability to use several sources of data to make fact-based decisions has enabled organizations to better plan for potential problems before they occur.
AI has also resulted in improved decision-making and automation technologies, lessening the strain on employees and allowing them to focus their efforts where they are most needed.
With AI, businesses can anticipate problems and reroute shipments around them if needed. All in all, AI is transforming the way we approach supply chain management for the better.
How AI can make supply chains more sustainable?
Artificial intelligence can help organizations reduce their carbon footprint with more efficient production and delivery processes.
AI can be used to forecast consumer demand, suggesting when and where products should be stored for optimal efficiency and sustainability.
For example, storing the right items closer to the end user means that vehicles don’t have to travel long distances for deliveries, reducing the distance traveled and amount of fuel used.
AI can also help with logistics by enabling seamless coordination between different organizations according to Robert Boute who is Full Professor and Partner at Vlerick Business School.
This can assist enhance supply chain sustainability and efficiency by allowing companies engaged in manufacturing, storage, and delivery to collaborate harmoniously.
There is no doubt AI has a crucial role to play in improving the sustainability of a company’s supply chain.