Will AI Remove all the Human Touchpoints in Supply Chain Management?

Technology enables businesses to improve and streamline ineffective processes. Whether it was the industrial revolution or the invention of the computer, the primary objective was to reduce effort and keep up with the changing demands of customers. When it comes to customer satisfaction, one key thing all companies rely on is the supply chain.

The supply chain is an amalgamation of various operations and processes that are essential for the timely delivery of products to their final consumers. Timely delivery enhances consumer satisfaction. The global supply chain has in recent years been hit by a string of events (like the geopolitical crisis, the COVID-19 pandemic, and natural disasters), that have increased volatility and forced businesses to change the way they manage their supply chain. The most important question that has arisen is how to future-proof the supply chain to effectively and agilely respond to similar crises in the future. The answer of course lies in the use of technology.  

With technological advancements coming ever more rapidly, businesses are leaning on technology to mitigate supply chain risk and maximize efficiency. We’re a long way from the end of this process, but artificial intelligence (AI) is a new milestone indicating the right direction.  

Artificial Intelligence, commonly known as AI, is the intelligence or the ability of a machine (typically a computer) to learn, solve problems, plan, and forecast. It is intriguing to note that AI has been around since the 1950s. Still, it took a global pandemic and a fiasco of all processes to realize its importance. Today companies have no dearth of data, and it’s time to accelerate the success of their supply chain by integrating AI.  

So, does that mean stockouts will now be a thing of the past?

Supply chains usually are long and multifaceted; you can’t control the external drivers, which increases the risk of your shipment not reaching the right place at the right time. However, analysts are certain that using machine learning and AI in the supply chain will make it easy to predict what could go wrong and potentially avoid disruption entirely.  

AI impacts the supply chain in myriad ways, enabling cross-functional decision-making. Machine learning uses algorithms to study consumer buying patterns, improve the efficiency of warehousing, and more. With the help of generative AI in the supply chain, businesses can predict tasks like required maintenance, identify optimal shipping routes, tell whether it would be better to ship Air or Ground, and forecast demand.  

If AI succeeds in delivering what it promises, empty shelves will be a thing of the past, and you will never lose a customer due to out-of-stock scenarios.  

A boon or a double-edged sword?

The potential of AI is undoubtedly huge. However, to say that becoming AI-powered is a straight road would be a lie. From the complexities of the system to the higher cost of training, there are various challenges that businesses need to overcome before fully integrating AI. Businesses now have a large haystack of data, and predicting demand based on that cluttered data is the 21^st century version of finding a needle in a haystack. Will AI allow companies to identify bottlenecks in the supply chain sooner, or will it be another addition to the pile? Only time will tell.  

Merits of AI in the Supply Chain

1. Precise stock management

What determines the efficient flow of stock in the warehouse? An accurate inventory forecast. Simply put, precise inventory management mitigates the risk of unexpected stockouts and bloated warehouses. However, accurate stock management is a difficult task; many elements such as order processing, packaging, and picking are highly error prone. That’s where AI-enabled supply chain management will be effective and can predict based on customer buying patterns.

2. Enhanced warehouse efficiency

Warehouses play a significant role in the supply chain, whether in the form of fulfillment centers or storage yards; how quickly you can manage, process, and flow dictates your delivery speed. Using AI will help automate aspects such as retrieval of items, which will be a step closer to solving the complexity of warehouse operations.

3. Decreased operational costs

One key benefit of AI in the supply chain that no business can overlook is cost reduction. The tools powered by AI and machine learning can ensure error-free learning for a long time, thus reducing the risk of workplace accidents and human-generated errors, which can detrimentally affect profitability.