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How is AI used in Supply Chain Management and Logistics?

Nov 14, 2018

The term Artificial Intelligence (AI) was first coined in 1956. Since then it has been transformed from concept to reality. In more recent years it has evolved and developed, becoming ever-increasingly common in many industries including the supply chain and logistics. The main benefits include streamlined processes along with reduced costs and increased accuracy. This technology not only facilitates the automation of repetitive tasks, it allows machines to learn and take on some decision-making capabilities as well. Some examples of AI applications in supply chain management and logistics include:

AI in Logistics - American Group.jpgChatbots help streamline the procurement process by automating and expanding processes. Most are able to place purchase orders, answer questions, conduct research, assist with invoicing and communicate with customers.

Supply chain planning may be accomplished with the machine learning aspect of AI. It helps with the forecasting of inventory based on supply and demand information. Machine learning with the right data can also increase agility and optimization of supply chain decision making processes by providing deeper insights.

Warehouse management is another area where machine learning comes into play. It simplifies planning and management by generating intelligence gleaned from data. This analysis helps in maintaining proper stocking levels and reducing inventory risks. This is accomplished by looking at inventory attributes such as shelf-life and likelihood of damages when in storage. 

Maintenance of clean data is facilitated by an aspect of AI called Natural Language Processing (NLP). This technology ensures the data being used to generate insights is complete, consistent and accurate so conclusions drawn are reliable. When data to be analyzed is in different languages, NLP allows it to all be translated to one standard instead of a variety. This sanitization of the massive amounts of data used in logistics operations results in valid useful business decisions.

Driverless trucks wouldn’t be a possibility without artificial intelligence and machine learning. This technology is involved in making many of the safety features developed for autonomous vehicles that are also being used in driver-operated trucks. As driverless trucks become a reality, they will help reduce costs and increase efficiency by eliminating the need for driver breaks and allowing 24 hour driving. This will also free drivers for shorter hauls and aid in the alleviation of the driver shortage

Robotics are made possible in the supply chain by AI. This type of automation facilitates locating, tracking and moving inventory inside warehouses and ground distribution hubs.

Computer vision, powered by AI, allows for easy visual inspection along the supply chain. This helps identify damage, classify the type of damage and determine the appropriate corrective action more quickly. When used to inspect trains wagons, for example, it keeps freight moving along with minimal interruption.

Extending the life of machinery and assets through the application of machine learning and the use of IoT sensors. These sensors generate a lot of data that is then analyzed by machine learning powered by AI. It can proactively identify variances in equipment performance. This ensures repairs and routine maintenance are completed before a breakdown and resulting production stoppage. The outcome – the supply chain keeps humming along with less disruption.

As you can see, there are many applications of artificial intelligence impacting supply chain management and logistics positively. The ones discussed here are just the tip of the iceberg today and there are many new ones being developed on an ongoing basis. Looking for ways to streamline your supply chain management and logistics? Contact American Group.

American Group is a 3PL with decades of experience guiding businesses through the selection, preparation, and shipping of their freight. Contact us for assistance with your next shipment by phone at 866-553-6608 or by email at We’re here to make Shipping.Simplified®.