A supply chain is like a web that connects all the business components such as manufacturing, procurement, logistics, sales, marketing, and so on. The recent global pandemic and other geopolitical disruptions demonstrated how weak supply chains could bring down whole organizations. Many companies are investing in digital solutions to optimize their supply chain operations.
Artificial intelligence (AI) is a popular technology that is making every sector smarter and more resilient. The global supply chain AI market is projected to reach $13.5 billion by 2026 (See Figure 1).
Figure 1. Global AI supply chain market from 2020 to 2026
This article explores the top 5 AI applications in supply chain management and how supply chain leaders can approach them.
Accurate predictive analytics/forecasting
Predictability is one of the main goals of every supply chain manager. In other words, they simply want to know what the future will look like in terms of demand, market trends, etc. In today’s world, 100% accurate predictions are not possible. However, by using AI, supply chain managers can make highly accurate predictions.
AI-enabled demand forecasting applications can significantly increase forecast accuracy. This level of accuracy leads to:
- Improved optimal inventory level determination
- Safety stock optimization based on waste reduction and resilience
- Detailed inventory requirements for specific regions
- Reduced demand and supply fluctuation across the supply chain (Reducing stock-outs, backlogs and)
- Reduced storage costs
Watch how AI can utilize data generated from the consumer to create accurate demand forecasts and adjust them in real-time to make the supply chain smarter and more robust.
The global furniture brand Ikea has also developed a demand forecasting tool based on AI, which uses historical and new data to provide accurate demand forecasts.
To enhance demand planning in your business, check out our data-drive list of Demand Planning Software.
Enhanced supplier relationship management
Many of the current issues we face in global supply chains are related to weak supplier relationship management. Due to a lack of collaboration and integration with suppliers, many supply chains, such as food and automotive, faced serious disruptions during the global pandemic.
AI can help improve supplier relationship management (SRM) by making it more consistent and efficient. AI-enabled SRM software can aid in supplier selection based on factors such as pricing, historical purchase history, sustainability, etc. AI can also help assess supplier performance and rank them accordingly.
Through AI, repetitive supplier communications such as invoice sharing and payment follow-ups can also be automated.
To learn more about how to improve supplier relationships management, check out this quick read.
You can also check our data-driven list of Supplier Relationship Management (SRM) Software.
Sponsored
Biz Dev Dynamics specializes in supply chain design and optimization and can help strengthen your supplier relationships. They offer yesRM (your eyes on-site relationship management), delivered by their global team of independent contractors who visit your supplier at their location to:
- represent your company
- strengthen individual relationships
- validate their data before it is shared
- ensure compliance
- enhance supply chain visibility and transparency
To enhance your supply chain visibility, check out our data-driven list of Supply Chain Visibility Software.
Computer vision in supply chains
AI-enabled computer vision systems are also changing how supply chains operate. From improving quality control to inventory management, computer vision has various applications in supply chain optimization.
AI-powered computer vision systems can automate and improve the quality assurance of finished products. Watch how BMW uses computer vision to scan car models as they move on the assembly line.
Bots enabled with computer vision, and AI can be used to automate repetitive tasks in inventory management, such as scanning inventory in real-time.
Watch how Sam’s club, an Amazon-convenience store uses cleaning robots installed with a computer vision system to scan inventory levels in its stores and warehouses.
To learn more about computer vision, check out comprehensive articles.
Supply chain automation
Supply chain automation is not possible without AI. AI is the brain that gives supply chain automation technologies such as warehouse robots, autonomous vehicles, RPA, etc., the ability to perform repetitive and error-prone tasks automatically.
Through AI, the following supply chain tasks can be automated:
- Through AI and RPA, back-office tasks such as document processing can be automated.
- Transportation automation in a supply chain can also be achieved through AI. Companies like Amazon, Tusimple, and Nuro are extensively investing in transport automation technologies such as autonomous trucks.
- Warehouse automation is another use case of AI in supply chain management. AI-enabled technologies such as cobots are helping drive efficiency, productivity, and safety in warehouse management. Ocado is one of the leading warehouse automation market players.
Watch how DHL leverages robotics enabled with AI in its supply chain operations
To learn more about supply chain automation, check out this comprehensive article.
You can also check out our data-driven list of Supply Chain AI Tools.
Improving sustainability
Sustainability is a growing concern of supply chain managers since most of an organization’s emissions are produced through its supply chain. AI can help improve supply chain operations to make them greener and more sustainable.
AI can help optimize logistics routes to reduce gas consumption. UPS’s initiative does exactly that by using AI/ML models. AI can also be used for accurate demand forecasting, which can result in reduced inventory levels, waste, and carbon emissions across the supply chain.
AI powered with big data can help the supply chain become not only sustainable but resilient at the same time.
To learn more about how AI and other technologies can help improve supply chain sustainability, check out this quick read.
You can also check out data-driven lists of supply chain optimization tools and services to find the option that best fits your business:
Further reading
If you have any questions, feel free to contact us:
A supply chain is like a web that connects all the business components such as manufacturing, procurement, logistics, sales, marketing, and so on. The recent global pandemic and other geopolitical disruptions demonstrated how weak supply chains could bring down whole organizations. Many companies are investing in digital solutions to optimize their supply chain operations.
Artificial intelligence (AI) is a popular technology that is making every sector smarter and more resilient. The global supply chain AI market is projected to reach $13.5 billion by 2026 (See Figure 1).
Figure 1. Global AI supply chain market from 2020 to 2026
This article explores the top 5 AI applications in supply chain management and how supply chain leaders can approach them.
Accurate predictive analytics/forecasting
Predictability is one of the main goals of every supply chain manager. In other words, they simply want to know what the future will look like in terms of demand, market trends, etc. In today’s world, 100% accurate predictions are not possible. However, by using AI, supply chain managers can make highly accurate predictions.
AI-enabled demand forecasting applications can significantly increase forecast accuracy. This level of accuracy leads to:
- Improved optimal inventory level determination
- Safety stock optimization based on waste reduction and resilience
- Detailed inventory requirements for specific regions
- Reduced demand and supply fluctuation across the supply chain (Reducing stock-outs, backlogs and)
- Reduced storage costs
Watch how AI can utilize data generated from the consumer to create accurate demand forecasts and adjust them in real-time to make the supply chain smarter and more robust.
The global furniture brand Ikea has also developed a demand forecasting tool based on AI, which uses historical and new data to provide accurate demand forecasts.
To enhance demand planning in your business, check out our data-drive list of Demand Planning Software.
Enhanced supplier relationship management
Many of the current issues we face in global supply chains are related to weak supplier relationship management. Due to a lack of collaboration and integration with suppliers, many supply chains, such as food and automotive, faced serious disruptions during the global pandemic.
AI can help improve supplier relationship management (SRM) by making it more consistent and efficient. AI-enabled SRM software can aid in supplier selection based on factors such as pricing, historical purchase history, sustainability, etc. AI can also help assess supplier performance and rank them accordingly.
Through AI, repetitive supplier communications such as invoice sharing and payment follow-ups can also be automated.
To learn more about how to improve supplier relationships management, check out this quick read.
You can also check our data-driven list of Supplier Relationship Management (SRM) Software.
Sponsored
Biz Dev Dynamics specializes in supply chain design and optimization and can help strengthen your supplier relationships. They offer yesRM (your eyes on-site relationship management), delivered by their global team of independent contractors who visit your supplier at their location to:
- represent your company
- strengthen individual relationships
- validate their data before it is shared
- ensure compliance
- enhance supply chain visibility and transparency
To enhance your supply chain visibility, check out our data-driven list of Supply Chain Visibility Software.
Computer vision in supply chains
AI-enabled computer vision systems are also changing how supply chains operate. From improving quality control to inventory management, computer vision has various applications in supply chain optimization.
AI-powered computer vision systems can automate and improve the quality assurance of finished products. Watch how BMW uses computer vision to scan car models as they move on the assembly line.
Bots enabled with computer vision, and AI can be used to automate repetitive tasks in inventory management, such as scanning inventory in real-time.
Watch how Sam’s club, an Amazon-convenience store uses cleaning robots installed with a computer vision system to scan inventory levels in its stores and warehouses.
To learn more about computer vision, check out comprehensive articles.
Supply chain automation
Supply chain automation is not possible without AI. AI is the brain that gives supply chain automation technologies such as warehouse robots, autonomous vehicles, RPA, etc., the ability to perform repetitive and error-prone tasks automatically.
Through AI, the following supply chain tasks can be automated:
- Through AI and RPA, back-office tasks such as document processing can be automated.
- Transportation automation in a supply chain can also be achieved through AI. Companies like Amazon, Tusimple, and Nuro are extensively investing in transport automation technologies such as autonomous trucks.
- Warehouse automation is another use case of AI in supply chain management. AI-enabled technologies such as cobots are helping drive efficiency, productivity, and safety in warehouse management. Ocado is one of the leading warehouse automation market players.
Watch how DHL leverages robotics enabled with AI in its supply chain operations
To learn more about supply chain automation, check out this comprehensive article.
You can also check out our data-driven list of Supply Chain AI Tools.
Improving sustainability
Sustainability is a growing concern of supply chain managers since most of an organization’s emissions are produced through its supply chain. AI can help improve supply chain operations to make them greener and more sustainable.
AI can help optimize logistics routes to reduce gas consumption. UPS’s initiative does exactly that by using AI/ML models. AI can also be used for accurate demand forecasting, which can result in reduced inventory levels, waste, and carbon emissions across the supply chain.
AI powered with big data can help the supply chain become not only sustainable but resilient at the same time.
To learn more about how AI and other technologies can help improve supply chain sustainability, check out this quick read.
You can also check out data-driven lists of supply chain optimization tools and services to find the option that best fits your business:
Further reading
If you have any questions, feel free to contact us: