4 Ways Artificial Intelligence Is Impacting the Supply Chain
Artificial intelligence is shaping the future of supply chain companies, helping to improve accuracy, speed, efficiency, and more. Here are 4 practical ways for supply chain companies to incorporate AI.
A recent Forbes article focused on how specific supply chain companies are making advances with artificial intelligence. And, with powerful stats like these, it’s easy to see why more and more companies are investing in AI:
- AI technology can enhance business productivity by up to 40%.
- 84% of global business organizations believe that AI will give them a competitive advantage.
- By 2025, the global AI market is expected to be almost $60 billion; in 2016 it was $1.4 billion.
- AI startups grew 14 times over the last two decades.
But after reading the Forbes article, I was left thinking about practical applications for AI within the industry. Here are four examples of how AI can be beneficial to your supply chain.
4 ways artificial intelligence can benefit your supply chain
1) Autonomous vehicles
We’ve all known for many years that driverless trucks have major potential to affect the supply chain. And though we aren’t there yet, if autonomous trucking can be developed to its potential, the technology would allow for faster, more efficient deliveries without the need for drivers.
“Autonomous vehicles are being fitted with cameras, sensors and communication systems to enable the vehicle to generate massive amounts of data which, when applied with AI, enables the vehicle to see, hear, think and make decisions just like human drivers do,” writes Suhasini Gadam for Medium.
As the cost of producing autonomous vehicles drops, the benefits for the supply chain increases. Aside from efficiency, reduced lead time, and route optimization, PwC’s new report shows the digitization and automation of processes and delivery vehicles will reduce logistics costs for standardized transport by 47% by 2030.
2) Final-mile delivery route efficiency
Route optimization software and AI-powered GPS tools are making their mark. And for good reason. Big-names like Amazon have left smaller businesses clamoring to keep up with their efficiency. In fact, Amazon is predicted to account for 50% of the entire e-commerce retail market in the U.S. by 2021.
AI is helping smaller brands compete with larger corporations by producing cost-effective technologies that end in lower overhead costs and higher quality customer service. AI provides prediction on delivery quantities, locations, and patterns for optimal delivery routes, including road conditions and other factors.
3) Demand forecasting
Machine learning has the ability to quickly identify patterns in supply chain data by relying on algorithms to find the most influential factors. The ability for machines to find data patterns without human intervention has applications across the supply chain.
In an interview with Forbes, Dr. Michael Feindt said:
“To help companies draw the right conclusions from the data they gather, businesses need to apply ML and AI technology designed to grasp the oncoming impacts of what’s happening everywhere in the moment and predict how demand and supply will look in the future. That means having algorithms that can evolve over time.”
AI makes it easier for brands to identify patterns in their supply chain and forecast the needs of their business to make internal processes more efficient, eliminate costs, and reduce loss of goods. The ultimate goal of AI is to forecast demand without excess production.
4) Chatbots for marketing and operational procurement
Chatbots are AI computer programs designed to conduct conversations, simulating how a human would interact. The program communicates with customers inside messaging apps, like Facebook Messenger.
Chatbots are relatively inexpensive, inherently low-maintenance, and surprisingly user-friendly — to both the buyers interacting with them and the vendors setting them up. They help website visitors find the information they need quickly, while gathering user data that is useful in marketing and sales efforts, all without taxing human resources. In fact, Chatbots Life reports that businesses can save up to 30% of costs associated with servicing customer requests by using a chatbot.
How is artificial intelligence impacting your supply chain?
- Will AI Change Supply Chain Leadership?
- Supply Chain and Marketing/Sales Are AI’s First Big Opportunities for Business Use
- 7 Ways Machine Learning is Improving Supply Chain Management