AI has come to the logistics and supply chain industry to improve its effectiveness and reduce costs. Companies that have already implemented Artificial Intelligence have seen good results and have reduced logistics costs by up to 15%.
Artificial Intelligence can be very beneficial and provide greater planning and productivity. You will have lower logistics costs, higher production, and more effective working conditions. The global supply chain has experienced a complex environment in recent years due to different events, such as geopolitical issues, the COVID-19 pandemic, and some natural disasters.
These events have affected the market, and companies have had to change the supply chain management to maintain themselves. With AI, companies reduce the problems associated with manual supply chains.
Artificial Intelligence (AI), Big Data, and other digital systems of the new era are helping global organizations and companies better manage logistics and supply chains. It is a way to solve current challenges, and solutions can be generated in the future to stay in the market.
The supply chain is extremely important for companies to succeed and allows you to make more effective decisions. In the future, the union of all logistics and supply chain elements will be driven by AI.
With digital technology, operational sustainability can be improved by including different business processes, such as acquisitions, product development, sales, analysis, demand forecasts, etc. Any company can create a robust AI system to make better decisions in different functions.
Industry experts believe that AI-based logistics and supply chain management solutions will be more efficient and help overcome any challenges that come your way. It will be a way to take advantage of all opportunities and resolve any inconvenience or limitation that may arise in any sector of operations within the company.
To realize these solutions, companies will need to optimize the value of AI and take organizational steps to not rely solely on technology. Artificial Intelligence has arrived to revolutionize logistics and the supply chain, offering time reduction and speed in decision-making.
Companies using established solutions in Artificial Intelligence have improved their productivity and performance. These solutions offer production transparency, demand forecasting, comprehensive business planning, product delivery optimization, and physical flow automation.
Using predictive models will offer efficient solutions to companies, and they will better understand everything associated with supply chains. By optimizing supply chain management, several cutting-edge solutions will emerge that will benefit any business.
Today, traditional AI vendors and startups that have embraced disruptive business models are competing to stay in the market. They offer new offers that include demand planning, a process within supply chain management where the company can project future demand and adapt its production.
It will go a long way in integrating machine learning and leveraging data for business success. AI will enable you to address different logistics and supply chain challenges. State-of-the-art technologies are fashionable and effective in solving these problems and challenges.
AI is revolutionizing the logistics and supply chain industry in different ways:
1. Demand forecast: Artificial Intelligence-based demand projection or forecast systems will allow you to estimate the sales of a product. It is a predictive analysis using historical sales data, social media trends, weather patterns, and other relevant data to more accurately predict future demand.
This forecast allows companies to improve inventory levels, save time and avoid waste. You will reduce costs, making your company more productive in the market. For example, Walmart uses AI to improve inventory management and avoid store stockouts.
AI is optimizing demand forecasts and can considerably reduce errors in the supply chain.
2. Route optimization: AI-based route optimization systems benefit logistics companies. It will help you plan delivery routes and reduce time, allowing you to be more effective and avoid structuring routes manually.
Route optimization systems will consider the weather, traffic, and road conditions for a more successful delivery. These AI-based systems will help you reduce transportation costs because you will save on travel time by optimizing routes.
It will increase the speed of delivery to offer a more efficient service in less time. You will be able to save on fuel and improve the customer experience. The shipping company UPS uses an AI-based route optimization system called ORION that provides optimized delivery routes for its drivers.
3. Warehouse management: Warehouse management software will allow you to optimize your inventory. AI can automate order picking and packing functions and better control your warehouses. Depending on your arrival, you can store your products and use the space better.
For example, Amazon uses AI-based robots to move products around its warehouses and allows it to sort packages for delivery.
4. Last-mile delivery: Last-mile delivery is a very important process for any company that needs to ship products. AI-powered delivery software makes it possible to optimize the last mile of the delivery process.
AI allows companies to plan their routes and predict delays affecting delivery. Last-mile delivery is usually the most costly process in the supply chain, and it is vital to meet established deadlines.
DHL is using drones for last-mile deliveries in urban areas. This has allowed them to reduce costs and delivery times.
5. Risk management: AI also allows companies more effective risk management. Companies will be able to identify and assess potential risks that may arise in the supply chain. With AI-based risk management systems, companies can create effective strategies to avoid or mitigate problems affecting their production.
For example, the container shipping company, Maersk, uses AI to analyze multiple data to predict possible risks and interruptions that affect its supply chain.
Artificial Intelligence (AI) came to the logistics and supply chain industry to improve its effectiveness. Improve demand forecasting, warehouse management, route optimization, risk management, and last-mile delivery.
They are important technological advances to optimize all the elements that make up the supply chain. AI provides significant advantages, allowing you to reduce costs and improve the company’s efficiency.