Artificial intelligence (AI) capabilities are popping up in a variety of business apps, and they're a panacea for anyone who wants someone to write, draw, think, or just get work done. But AI's greatest feature is its ability to shift workers, especially in the supply chain, from mundane, repetitive tasks to more strategic endeavors. And therein lies the biggest benefit.
The convergence of AI and supply chain is intuitively obvious, so the list of procurement and logistics tasks that it could enhance or change is long: demand forecasting, inventory planning and management, production planning, forecasting, procurement supply network design, transportation routing, warehouse management, order fulfillment, customer service, risk management, etc. Meanwhile, market experts expect the market to grow significantly. According to Market.us, the global AI in supply chain market size is expected to reach approximately $157.6 billion by 2033, up from $4.5 billion in 2023. The average growth rate during the forecast period is expected to be 42.7%.
It's no surprise. AI promises to give supply chain and logistics professionals ways to solve complex problems, automate tasks, optimize decisions, improve performance, and create value in ways that contribute to the bottom line. By reducing risk, improving the accuracy of business forecasts, and optimizing supply chain management activities, AI can reduce costs and make operations more resilient. So instead of engaging in repetitive tasks that can be easily automated, procurement professionals can focus on deriving trends, patterns, and insights from supply chain data to drive innovation and gain competitive advantage.
Andrew Moeller, Flip Electronics
But turning the idea of an AI-driven supply chain into a reality is a complex challenge. The task involves a variety of activities, including:
- Learn about new technologies (such as large-scale language models like ChatGPT, Bard, Llama) and tools (such as CoPilot, Dali, Gemini) – new solutions emerge every day.
- Rethink your workflows to take full advantage of AI technology and capabilities.
- Retrain employees and redefine roles to allow individuals to focus on higher-value activities.
- Address data quality to ensure intelligence inputs yield useful results.
As an added benefit, OEMs can expect AI to transform relationships with sales reps, vendors, and distribution partners. Ideally, these partners will use AI to quickly organize business requests and work more closely with key accounts. This means that premium accounts will get more attention from partners, while more general opportunities will be passed on to junior sales reps or automated systems.
If you haven't yet considered implementing AI in your supply chain, now is the time to start: Done right, it can enhance your operations by improving efficiency, quality, and resilience.
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