AI and the Supply

Gartner defines artificial intelligence as a technology that applies logic-based techniques and advanced analysis, including machine learning for interpreting events, supporting and automating decisions, and taking actions. It is the buzzword for organizations grappling with customer demands that are ever-changing, and a shortage of skilled labor.

Artificial intelligence (AI) has a knack of freeing up employees so that they can focus on things that are more important, such as being creative, solving problems that are complex, and allowing customers to get facetime, etc., and for managing repetitive and mundane tasks. When it comes to supply chain management, AI has gained momentum quickly.

It may have to deal with plenty of inefficiencies, but the expectation still remains that it must perform at higher levels of speed and efficiency. That’s why this vital business component remains ripe for automation and improvement through machine learning and artificial intelligence.

Market Worth Billions

A new report from Research and Markets has already revealed that artificial intelligence has revamped the operational processes and facilitated supply chain solutions that are cost-effective. The report states that different forms of artificial intelligence have been integrated into solutions for supply chain management for improving everything from processing automation to offering enhanced visibility into real-time and static data and management information systems that are related.

Apart from decision-making that is fully automated, artificial intelligence systems have also leveraged different forms of cognitive computing to optimize the combined efforts of human and artificial intelligence. The report from Research and Markets has estimated that the global market for artificial intelligence in supply chain management is going to reach $1.4 billion by the year 2025.

Artificial intelligence in supply chain management has enabled enhanced automation of supply chain by using virtual assistants that are both used internally (inside organizations) and by the members of supply chain (these are customers of supply chain).

Research and Markets has predicted that combining the Internet of Things and artificial intelligence in supply chains is going to enhance operational efficiency and flow, as supply chains supported by artificial intelligence will become at least 50% more effective for on-time deliveries with fewer errors.

Tech you Can’t Ignore

Gartner named artificial intelligence as one of the top technology trends for supply chain in 2019, and today supply chain leaders simply can’t ignore artificial intelligence as a technology. Through natural language and self-learning, for instance, artificial intelligence capabilities may help in automating different processes for supply chain such as predictive maintenance, demand forecasting, or production planning.

Artificial intelligence supports the shift toward broader automation of the supply chain, which is what many companies are seeking. For instance, artificial intelligence can improve risk mitigation by identifying evolving patterns continuously, analyzing data in large sets, and predictive events that are disruptive as well as their potential resolutions.

Artificial intelligence is everywhere, and it is thought that its biggest impact would be felt in the supply chain. The technology can manage deliveries and anticipate orders thereby drastically increasing the efficiency in all departments of the supply chain. It is estimated by McKinsey, the research firm, that organizations can gain between $1.4 trillion and $2 trillion every year by using artificial intelligence in manufacturing and supply chain.

Painting the Picture

Organizations have already posted excellent results from their investments in artificial intelligence, and especially within their supply chains. For instance, Rolls Royce is using artificial intelligence algorithms on their ships for sensing everything around them in the waters and classifying items based on the threats they are posing to the ships. UPS is using GPS tools powered by AI to create routes that are the most efficient for their fleets, while Lineage Logistics is using an artificial intelligence algorithm for forecasting when their food orders will leave and arrive at the warehouse.

You can expect to see some more successful examples and pilot projects as more organizations and businesses start experimenting with artificial intelligence in their supply chains. When used and implemented correctly, AI allows exceptional precision and agility in supply chains, irrespective of the industry. It also has the potential to ignite transformational increases in efficiency, and decreases costs by automating repetitive manual tasks.

Misconceptions about AI in Supply Chain

Supply Chain used to be an insider term used by industries, but has now become a common phrase that is on the lips of everyone around the world, and rightfully so. From beer to baby formula, to semiconductors, all the supply chains have broken down.

Does artificial intelligence have the potential to mend these fractured and frayed supply chains? In all probability, it can, but you must first fight the many misconceptions about AI in supply chain, and here are some of them:

1.     AI Won’t Replace Humans in the Supply Chain

Humans will always be a vital part of the supply chain, and AI is not meant to replace them. Rather, AI can help supply chain professionals by providing them with data-driven insights that can make their jobs easier and more efficient.

2.     AI is Too Expensive for My Company

While AI-powered solutions may have been out of reach for some companies in the past, that is no longer the case. There are now many affordable AI-powered solutions on the market that can help businesses of all sizes to improve their supply chain operations.

3.     AI is Too Complex for My Team to Implement

Again, this is simply not true. There are many AI-powered solutions on the market that are designed to be user-friendly and easy to implement. In addition, there are many service providers who can help companies with the implementation of AI-powered solutions.

4.     My Company is Too Small for AI

This is another myth that needs to be debunked. AI-powered solutions can be beneficial for companies of all sizes. In fact, small and medium-sized businesses may actually benefit more from AI-powered solutions as they can help them to level the playing field with larger companies.

5.     We Don’t Need AI in Our Supply Chain

This is perhaps the biggest myth of all. AI can offer a number of benefits for companies, including improved efficiency, cost savings, and better decision-making. Any company that is not using AI in their supply chain is at a competitive disadvantage.

Examples of AI in Supply Chain

Even though leaders in supply chain management generally agree that technology investments are vital for tightening up or smoothening out supply chains, they haven’t seen any significant return on their investments. Going by current estimates, only 1 in 5 businesses have seen artificial intelligence deliver results that are positive in their supply chains.

To prove to organizations that artificial intelligence has a future in supply chain management, here are some examples of the many ways in which artificial intelligence can be used in supply chains.

1.     Planning and Scheduling:

AI can be used to create more efficient plans and schedules for supply chain operations. This includes everything from raw materials procurement to manufacturing to distribution and delivery.

2.     Inventory Management:

AI can help optimize stock levels to avoid both overstocking and stockouts. It can also predict future demand patterns to ensure that the right products are always in stock.

3.     Transportation Management:

AI can be used to plan and optimize transportation routes to minimize cost and maximize efficiency. This includes both land-based and air-based transportation operations.

4.     Customer Service and Support:

AI can be used to provide better customer service and support throughout the supply chain. This includes everything from order tracking to returns management.

5.     Security and compliance:

AI can help organizations to better secure their supply chains against risks such as theft, fraud, and counterfeiting. It can also help them to comply with regulations such as those relating to food safety or hazardous materials.


Artificial intelligence in supply chain innovations has paved the way for a future where eventually, we will be able to see autonomous vehicles powered by AI being used in the supply chain. The data being mined and analyzed on these platforms will continue to improve the efficiency and cost of a global supply chain system that is growing increasingly complicated.

As the speed of change in supply change management is ever-increasing, it is up to organizations to find out better ways to help their customers and deal with uncertainty within this field. Technology holds much promise in helping companies solve problems faster than people, and in a manner that is more customized, allowing them to stand out from their competitors.

Artificial intelligence is significant to supply chain management as it allows businesses to elevate their operating standards. The future for AI in supply chain looks bright but it is up to each individual business to decide how they plan on implementing technology in supply chain management to get better results.

Marc-Roger Gagné MAPP