How AI is Reshaping the Supply-Chain and Logistics Industry

Computers are getting faster and smarter with each passing day. It has been spearheaded in a direction where computers are taught to mimic natural human intelligence, a concept and now a reality known as Artificial Intelligence (AI). Since its coinage in 1956, AI has been predicted to lead computing for automating and substituting all human processes, particularly in the industry and commerce.

Processes like supply chain management, which needs relentless focus and labor in all its operations can benefit deeply from the use of AI. With the developments in AI moving at breakneck speed, companies have already invested in AI for managing their supply chain. The result is complete automation from production to delivery along with an overall improvement in efficiency and speed. 

The application of AI has made the entire process of supply chain management more streamlined and accurate. It takes human labor out of the process, which is one crucial aspect companies look forward to reducing costs and errors. Meanwhile, AI is proving advantageous to other areas of supply chain management as well, which resulted in more companies adopting it into their workplaces.

Let’s digress a bit to talk about what artificial intelligence is about. Artificial intelligence is about taking the capabilities of Machines in terms of Intelligence beyond the monotonous processes, and adding a dash of autonomy to the decision-making capabilities. The advent of artificial intelligence has expanded the capability of automation and technology and has forayed into a Territory of operations that was once reserved only for human beings.

When it comes to the application of artificial intelligence, many industries and segments have benefited from it. One among those is the domain of supply chain management. Supply chain management is gaining importance by the day going to the disappearance of Geographic and physical borders when it comes to transactions.

As inferred by Gartner, the application of artificial intelligence in the field of supply chain management can be broken into two categories:

Augmentation: Artificial Intelligence

Augmentation is really a sophisticated word for addition. Artificial intelligence is seeing its uses even in everyday activities like setting an alarm using personal assistant like Google Assistant or Siri. This kind of Artificial Intelligence can be used in spaces where the guy does not have complete control over the outputs, but rather augments the human effort with some intelligence that needs to be essentially gathered from monotonous tasks. 

AR has transformed the software used in supply chain management. AR help truck drivers, warehouse workers, and management keep track of products by overlaying information onto the real world. Augmented reality is used efficiently in “pick and pack” service. In a large warehouse, AR enables to locate products easily and pack them. Logistics robots can easily scan a product for damage, check its weight and adhere to package shipping instructions.


Automation seems to be the password in every industry. There are certain instances where the process is so simple that Artificial Intelligence can take over the entire process including the final output. This completely eliminates the need for human intervention. With this elimination of human intervention, the probability of error is also greatly reduced. One fine example would be the implementation of robots in performing a few key steps when it comes to the manufacturing industry.

The future of supply chain management How will technology and AI shape tomorrow [Source: University of Liverpool Online]

A few specific aspects in which Artificial Intelligence can assist in supply chain management are:

Using chatbots: Chatbots

We have been using the internet as a communication medium using instant messengers for a while now, and the conversation generally starts with a templatized set of questions. These templatized questions and the conversations surrounding them can be automated using a chatbot. Chatbots help in streamlining the procurement related tasks through automation and augmentation. These chatbots can be used to help with the initial steps of procurement. The information that we receive from this chatbots could also help determine the validity of the leads. 

Chatbots can be used to automate numerous tasks especially in communicating with the customers via direct calls or text messages. The advancements in chatbot programs have enhanced their communication abilities, which have made them useful aids for a variety of tasks besides answering calls or queries. Most chatbots are able to place purchase request, conduct research, answer questions, file and document invoices alongside communicating with the customers.

Supply chain planning and machine learning:

Machine learning is the technological twin of artificial intelligence. Intelligence can only be achieved by learning, and if machines have to be intelligent, they have to learn automation. Supply chain management can incorporate machine learning, even if not for execution, at least for planning. Machine learning can help in a variety of aspects in supply chain planning.

Machine learning can help with the forecasting of inventory based on demand and supply. Facilitating the machine to learn with the right segments of data could also bring in a revolution in terms of agility and optimization of even the decision making processes in supply chain management. Teaching the human beings something is an arduous task -stitching machines the same thing only makes it a little bit more challenging. However, you can expect the Machines to learn things a bit faster and get more accurate with the time then you can expect human beings to be!

Machine Learning for Warehouse Management: 

Warehousing is an integral part of any Logistics Company, and it requires a good understanding of the inventory, the demand, the supply and the challenges in facilitating a smooth transition between the two ends to be successful in the field of Logistics.

Machine learning and artificial intelligence come in handy at this juncture, because the planning and Management for warehousing depend on the intelligence that can be gathered from the data. The data can analyze vital pointers, including the supply floors like overstocking or understocking, and even the kind of inventory that we are looking at, including the attributes of longevity and susceptibility to damages when in storage. 

Natural Language Processing for Data Sanitization:

The last couple of aspects that we have been looking at talks about data point data is very important to make calculated decisions. If the data is not like it, the decisions might not serve the purpose of being beneficial for the business. Therefore, it is essential to ensure that the data is clean and business-worthy.

Natural Language Processing, commonly abbreviated as NLP, is an element of artificial intelligence that takes care to decipher foreign language data, and streamline them in a way that it can be used for data processing. With the humongous amounts of data that the logistics industry Encounters, it is important to sanitize the data before it can be used to make important business decisions. The aspect of Natural Language Processing develops with Machine Learning and artificial intelligence.  

Related Webinar : Artificial Intelligence in layman’s terms

Autonomous and Self-Driving Vehicles:

Thanks to the innovations by Elon Musk and the automobile company Tesla, self-driven cars are no longer an element of science fiction. Self-driving vehicles have started to take over the realm of montane transportation. If there is one territory where this advancement can make a significant impact, it has to be in the field of logistics and shipping.

Driverless trucks might be in the nascent stages of development, but the progressive only point towards a positive conclusion. If driverless trucks are introduced, it can overcome a lot of hurdles, especially with respect to the mandatory crest that humans require. The laws in most of the countries mandate that drivers can only engage in 11 hours of break-free drive. With driverless trucks stepping in, the driving can go on effectively for 24 hours, and it will definitely reduce the cost by at least 25%.

With the advent of e-commerce on both B2B and B2C fronts, logistics is only gaining more importance by the passing day. A lot of eCommerce companies depend on the data from the logistics service providers to make more calculated decisions. By incorporating the latest in the world of Technology like the concepts of machine learning and artificial intelligence, it would not be right to say that the logistics industry would be far ahead of its time, because, in today’s world of rapidly changing advancements, it is important to be technologically advanced to even stay in the race!

Related Reading
Software for Logistics Management – Why Businesses need them . Read why your business needs logistics support here.


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    About the Author

    Tony Joseph

    Tony believes in building technology around processes, rather than building processes around technology. He specializes in custom software development, especially in analyzing processes, refining it and then building technology around it.He works with clients on a daily basis to understand and analyze their operational structure, discover (and not invent) key improvement areas and come up with technology solutions to deliver an efficient process.

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