What is Artificial Intelligence?

Artificial intelligence (AI) is an area of computer science that emphasizes the creation of intelligent machines that work and react like humans. Some of the activities computers with artificial intelligence are designed for include: Speech recognition.

Artificial intelligence is already powerful and continuing to grow. Everything from self-driving cars to social media is being defined by how fast technology can train machines to behave like humans, or perhaps even exceed them in capabilities.

AI in Supply Chain and Logistics:

Artificial intelligence is taking up the pace when it comes to global logistics and supply chain management. As per a number of executives from the transportation industry, these fields are expected to go through a more significant transformation. The on-going evolution in the areas of technologies like artificial intelligence, machine learning, and similar new technologies is said to possess the potential to bring in disruption and lead innovation within these industries.

Modern supply chains represent complex systems of organizations, people, activities, information, and resources involved in moving a product or service from supplier to customer. Supply Chain Management (SCM) solutions are typically manifest in software architecture and systems that facilitate the flow of information among different functions within and between enterprise organizations.


In fact, lots of companies have already benefited from AI investments. According to the report, State of Artificial Intelligence for Enterprises, Supply Chain and Operations was one of the top areas where businesses are driving revenue from AI investment.

Leading SCM solutions to catalyze information sharing across organizational units and geographical locations, enabling decision-makers to have an enterprise-wide view of the information needed in a timely, reliable and consistent fashion. Various forms of Artificial Intelligence (AI) are being integrated into SCM solution to improve everything from process automation to providing greater visibility into static and real-time data as well as related management information systems.

Impact of artificial intelligence in Logistics:

Examples, where data analytics and machine learning can be beneficial for supply chain management, is e.g. within demand forecasting and warehouse optimization. Given the vast amounts of data collected by industrial logistics, transportation and warehousing, being able to harness these data to drive operational performance can be a gamechanger for those that do it correctly. Given the vast amounts of data collected by industrial logistics, transportation and warehousing, being able to harness these data to drive operational performance can be a gamechanger for those that do it correctly.

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:

According to Accenture, 80 percent of all customer engagements can be handled by bots. 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.

UPS uses Orion, a GPS tool that helps drivers make timely and cost-effective deliveries. Routes can be planned and optimized depending on traffic conditions and other factors. Orion has helped UPS save nearly $50m annually.

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.

Regardless of how one view these changes, AI and associated technologies are about to take over global supply-chain management.

Source: readwrite.com, medium.com, supplychainbeyond.com, towardsdatascience.com, www.supplychainbrain.com, www.researchandmarkets.com.

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