Putting AI to Work in Global Supply Chains

 In Blog

As artificial intelligence (AI) continues to become part of our daily lives, the technology is helping organizations run their global supply chains. By simulating aspects of human intelligence—learning, problem-solving, decision-making, etc.—AI helps self-driving cars perceive their surrounding environments, virtual assistants respond to human language and healthcare providers more accurately diagnose patient conditions.

There’s real opportunity to use AI in supply chain management, and it’s more than just lip service. Unlike, say, blockchain—which has some proven, real-world use cases but hasn’t caught on universally (at least not yet)—AI came out of the starting block strong, fast, and ready to impact many corners of the business world.

On the supply chain front, for example, AI can be used to analyze vast amounts of data within a very short period of time, and usually in real-time. More specifically, predictive analytics powered by AI can help companies:

  • Forecast demand fluctuations and adjust accordingly.
  • Pinpoint looming disruptions like natural disasters or geopolitical events.
  • Optimize inventory levels across the end-to-end supply chain to avoid issues like the pandemic-driven supply disruptions.
  • Minimize supply chain risk by serving as a second set of eyes that complements human effort.
  • Ensure timely delivery of goods to customers.
  • Handle repetitive tasks, effectively freeing up employees to focus on more strategic supply chain optimization projects.

These are just some of the reasons companies are embracing AI as a supply chain management and planning tool. The trend is expected to continue, according to the World Economic Forum (WEF). “The year 2025 will see significant changes to global supply chain infrastructure – a necessity for the resilience of the nations and alliances that depend on it,” the organization says. “AI may hold the key.”

With most supply chain managers accepting the fact that they’re operating in a “new normal,” the WEF expects AI to continue contributing to the assessment and reorganization of globalized supply chains. “This should remove unnecessary complexities and mitigate vulnerabilities to the shocks and disruptions that have mercilessly plagued the industry,” it adds. “AI in the supply chain can revitalize individual companies’ activity, while elevating the industry as a whole.”

Streamline Operations & Enhanced Decision Making

Globally, the use of AI in supply chain is on track to hit $157.6 billion by 2033—up from $4.5 billion in 2023, according to Market.us. That growth is being driven by the increasing need for efficient and automated supply chain solutions across various industries. “The impressive compound annual growth rate (CAGR) of 42.7% during the forecast period highlights the growing reliance on AI technologies to streamline operations, optimize logistics, and enhance decision-making capabilities,” the research firm points out.

Citing recent industry statistics, Market.us estimates that 68% of supply chain organizations are using AI to improve operational traceability and visibility. To date, the results have been impressive. Companies using AI for supply chain planning and optimization, for example, cite a 15% reduction in logistics expenses, a 35% drop in inventory levels and a 65% improvement in service levels.

Demand forecasting is another area where AI’s footprint continues to expand. Companies are using AI algorithms to analyze historical sales data, market trends and other data. They’re using those insights to more accurately anticipate future demand fluctuations, optimize inventory levels and prevent both stockouts and overstocks.

Mike Horvath, COO at Revenova, says some of the most compelling use cases for AI in supply chain leverage natural language processing (NLP) to take unstructured text inputs (e.g., email, voice memos, etc.), digest the language and produce an actionable, reliable output. That output can then be added to workflows and used by other applications. For example, an application tasked with answering questions like “Where’s my order?” can use the textual inputs, query the transportation management system, and take other steps to find the answer to that question (and, provide it to the customer).

This can all happen without human intervention, which not only frees up employees to work on more important projects but also improves customer service levels. “That’s a really good AI use case we’re seeing in the supply chain space,” says Horvath, “where it can be used to process natural language and push out a response that the requestor can consume and understand.”

Making More Accurate Predictions

Predictive AI is another major area of opportunity that manages high volumes of data that can’t be gathered, assessed and acted on quickly enough using traditional means. Predictive AI can take that data and use it to answer vital questions like: What can you tell me about our data? What will happen next? What should I expect? And, how will the changes or events impact our global supply chain?

And because AI “learns” from the different inputs and use cases over time, its answers and recommendations improve as that learning takes place. For instance, some software vendors are using AI to help their customers monitor and respond to fluctuations in the spot trucking rates, effectively using today’s rates to predict next week’s rates. This is what makes AI unique and it’s something that supply chain operators are benefitting from as they navigate the complexities of today’s global marketplace.

“When you have an engine that learns from the different inputs and use cases, and uses those insights to enhance the effectiveness of its responses, the results can be pretty remarkable,” says Horvath. “These are just some of the most notable real-world use cases that we see right now for AI in supply chain, but we expect to see even more emerging this year as AI continues to make its way into the space.”

To learn more about Revenova TMS, Request a Demo. Follow Revenova on LinkedIn, YouTube, and X for the latest updates and news about Revenova TMS, the original CRM-powered Transportation Management System.

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