How Artificial Intelligence is Boosting Supply Chain Performance

Artificial Intelligence (AI) has become a topic of our mainstreams and everydays. The potential of AI enhancing everyday business activities and strategies hasn’t just sparked the interest of people and organizations globally, but has initiated rapid implementation.

 

Artificial Intelligence and machine learning is already enhancing our lives as consumers, now it is picking up momentum in supply chain management and logistics.

 

Supply Chain and Operations was one of the top areas where businesses are driving revenue from AI investment. With the volumes of data in supply chains and logistics growing every day, the need for more sophisticated processing solutions is becoming more urgent. That’s why many companies are adopting such AI computing techniques as machine learning, deep learning, and natural language processing.

 

AI promises to have a dramatic impact in four key areas:

 

Predictive capabilities are helping demand forecasting. When inventory lags demand, companies suffer losses. AI is ramping up efficiencies in network planning and predictive demand, allowing merchandisers to become more proactive. By knowing what to expect, they can adjust the number of vehicles and direct them to locations where maximum demand is expected. This leads to lower operational costs.

Chatbots are redefining customer support.  AI can personalize the relationship between customers and logistics providers.

A recent example of personalized customer experience is DHL’s partnership with Amazon. By activating DHL Parcel “skill” via the Alexa app, DHL Customers can ask Alexa to connect with Amazon Echo or Echo Dot smart speakers and confirm their parcels’ status. In the event of any issues arising during the interaction, Echo users can directly contact DHL for assistance by its customer-support team.

Smart warehouses are more efficient. A smart warehouse is a fully automated facility wherein most work is done through automation or software. In the process, tedious tasks are simplified, and operations become more cost-effective.

Alibaba and Amazon have already transformed their warehouses through the use of automation. Amazon recently rolled out machines that automate the job of boxing customer orders. In Amazon warehouses, robots work alongside humans to increase productivity and efficiency.

Genetic algorithms are improving delivery times and reducing costs. In the logistics business, every mile and minute matters. Companies can use a route planner based on genetic algorithms to map out optimal routes for deliveries.

Because of AI flexibility, companies are using AI to tackle all sorts of supply chain challenges. The best-known examples are the deployment of robots and automated guided vehicles (AGVs) in the warehouse. But there are other utilisations, such as:

  • Planning truck-loading to maximize space
  • Making pick-to-light warehouse systems more efficient
  • Decreasing order cycles through fulfillment-source optimisation
  • Developing the spatial-awareness capacities of warehouse robots, using machine learning and computer vision

 

It is clear that AI has become a game-changer in enterprise generally but especially in supply chain. With today’s fierce competition for supply chain superiority, the logistics industry could well become the testing ground for even more sophisticated AI-powered technologies.

 

In the near future, AI will set a new standard of efficiency across supply-chain and logistics processes. The game is changing quickly, creating a “new normal” in how global logistics companies manage data, run operations and serve customers, in a manner that’s automated, intelligent, and more efficient.

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