In this digital era, emerging technologies are always a hot topic for businesses to focus on. From the huge list of advanced technologies, AI is one of dominating tech. Not from this year, but from last decades. Businesses are remaining familiar with its potential and capabilities to push the bottom line.
The modern business consists of multiple departments, and for a smoother process understanding each part more effectively converts as a prominent vertex. Almost every next industry includes the supply chain in its entire business model. AI in supply chain holds different benefit bases.
For many years, AI has been a crucial support for supply chain management (SCM). We are already aware of the benefits offered by AI. However, with time, the range of benefits covered by AI in supply chain is extending at a fast pace. As we have entered in 2023, there is high expectation with AI's advanced role in supply chain management and logistics.
Using artificial intelligence in supply chain management is projected to generate $17.5 billion worldwide by 2028, according to the latest market report published by ResearchAndMarkets.
So let’s understand AI in supply chain and its benefits to the businesses.
What is AI in Supply Chain in 2023?
AI in supply chain refers to bringing automation in various areas including warehouses, inventory, and transportation by integration solutions developed with Machine Learning, Natural Language processing, and Cognitive Computing.
The primary aim is to bring automation and streamline supply chain associate procedures, activities, and operations. Overall, AI solutions transform the supply chain landscape. The advantages of AI are varied and substantial, ranging from cost savings and increased productivity to greater visibility and decision-making.
Did you know, AI is used by 31% of industries to automate decision making tasks.
Modern Contribution of AI in Supply Chain Management and Logistics
Based on recent reports, the Asia Pacific region leads the way in the adoption of AI in supply chain management (SCM), experiencing the highest growth rates. Furthermore, the global market for cloud-based AI-as-a-Service in SCM is projected to exceed $3.7B by 2028. Additionally, AI SCM in edge computing for IoT-enabled solutions is expected to reach $6.12B by the same year.
The concept of Artificial Intelligence of Things (AIoT) is emerging as a major enabler for SCM optimization. Material movement and tracking is currently the largest sub-segment within AI SCM in manufacturing. It has also been observed that AI-enabled supply chains can be over 67% more effective, with reduced risk and lower overall costs.
These findings present a range of opportunities for companies with complex supply chains, logistics management companies, and SCM software solution companies. To leverage these opportunities, it is recommended that businesses integrate AI with existing processes and systems, as well as with the Internet of Things. The use of AIoT platforms, software, and services, as well as data-as-a-service providers, can also be beneficial. Ultimately, the adoption of AI in SCM can lead to significant improvements in supply chain efficiency and performance.
Modern Supply Chain Management Challenges
With a growing business landscape, complications and challenges grow simultaneously. To overcome modern challenges, modern and innovative solutions are required.
AI-powered solutions are ultimately a step toward bringing automation into the business process. But, let’s talk about the modern challenge of supply chain management. And how AI advantages are the ideal solutions to mitigate such challenges.
- Modern global business ecosystems and enterprises heavily rely on complex structured supply chains to produce and deliver products to the end user across multiple geographical locations.
- In order to achieve step-by-step operations such as, production, procurement, marketing, sales, and logistics need to work efficiently in harmony.
- Additionally, other industries like manufacturers must have to ensure the packaging, shipping, and other critical aspects of the supply chain.
- In this fast-paced changing market trend demands for efficiency and speed are growing drastically. As a result, manufacturers must be in the pursuit of new and innovative solutions in order to optimize their supply chain management.
- Traditional approaches are insufficient in the digital world, thus many businesses are implementing or creating their own AI-powered solutions by partnering with Logistics And Transport Software Development Companies.
- Some of the major challenges faced by industries are demand volatility, sustainability, talent shortage, and transportation disruptions.
Revolutionising Supply Chain Management: Key Areas where AI is Making a Significant Contribution
- Demand Forecasting: A modern market is based on demand volatility. The response to this demand volatility is demand forecasting. In the traditional approach, demand forecasting was founded on prediction. It includes the process of making customer demand predictions by analyzing historical data. But nowadays, using AI in demand forecasting makes it a seamless process. By drafting machine learning algorithms that predict changes in customer demand through patterns and make predictions as accurate as possible.
- Inventory Management: AI in inventory management is the driving force to optimize end-to-end processes. Inventory management core area that creates impacts on various factors including customer satisfaction, business profitability, and ground-level success. The traditional method involves a wide range of manual steps to handle comprehensive inventory management. By optimizing procedures, cutting expenses, and raising customer satisfaction, the incorporation of AI systems can greatly enhance inventory management procedures. Businesses can optimize their inventory levels, save waste, and boost their bottom line by utilizing cutting-edge algorithms and machine learning strategies.
