Artificial Intelligence in Supply Chain Management 

Artificial intelligence in the supply chain helps businesses and companies to quickly perform operations, speedy decision-making, continuous improvement, and low cycle time. According to an estimate by Gartner, the global spending on IoT platforms and automated machines would reach 12.44 billion US dollars by the end of 2024 with a growth rate of 40%. Today, we’ll discuss artificial intelligence in supply chain management; key automated tasks in SCM, advantages, disadvantages; and examples.

What is Artificial Intelligence in Supply Chain Management?

Artificial intelligence in supply chain management amplifies and optimizes the capabilities of companies in terms of higher output; low SC cost, better productivity, demand forecasting, right capacity planning, and improving working conditions.

Disruption in SC and logistical processes has exposed the uncertain nature of the SC network. It compelled companies to develop a smart and efficient contingency plan that would help them deal with any type of SCM uncertainties.

AI Automated SCM Tasks 

Some of the main AI-automated SCM tasks are as follows;

Data Entry Automation

It is highly time-consuming to perform data entry tasks, but the automated SCM company could easily enter the information without doing it manually.

Optical Character Recognition

Optical character recognition (OCR) is a type of text recognition software that is highly beneficial to the SC network and process.

Digital Process Automation

DPA (digital process automation) allows you to perform multiple SCM tasks and activities with the assistance of an application.

Predictive Analytics

Predictive analytics allows companies to perform and automate SC tasks and activities by performing machine learning, predictive modeling, and data mining to analyze existing and previous trends and make future predictions.


Machine learning and artificial intelligence allow companies to automate their SC network and process to learn and expect the activities of users.


IoT is the physical equipment and tools with sensors connected with the software that helps companies send and receive data and information back and forth with other devices and communication networks.

Warehouse Robotics

Businesses and companies employ specialized software and automated systems to track the flow and movement of products and materials and perform various tasks.

Advantages of AI in SCM

Some of the main benefits and advantages of artificial intelligence in supply chain management are as follows;

Better Decision Making

AI has the capability to sift and analyze the mass volume of data and support the decision-making process of the company. It offers key insight and high transparency and facilitates right, quick, and precise decisions.

Low Risk

AI offers you data and insight on risk, gaps, weaknesses, and warehouse management systems. Businesses and companies develop efficient supply chains and a safe working environment by recognizing potential risk factors and taking the right actions.

Better Routes & Transportation Network

AI explores cost-efficient methods to move goods from one point to another by analyzing time, fuel consumption, and needed trucks. For instance, when you integrate AI with logistical operations, it amplifies route planning and package delivery time.

Short & On-time Delivery

AI tracks the flow of shipment and facilitates the timely delivery of goods by recognizing patterns and data. It helps managers to make the right and quick decisions. Walmart employs AI technology to decrease product stockouts, improve inventory levels, and analyze sales patterns. It leads you toward a higher customer satisfaction level.

Relationship with supplier

A better professional relationship is suitable for all parties like planners, retailers, manufacturers, and suppliers. Collaboration helps companies to avoid overstocking and stockout situations.

Low Operational Cost

Businesses and companies could reduce operational costs by decreasing production and purchasing expenses. For instance, a grocery store procures fresh fruits and vegetables directly from the farmers, then decreases the 3rd party cost and makes the products readily available to the store.

Disadvantages of AI in SCM

Some of the main challenges and disadvantages of artificial intelligence in supply chain management are as follows;

Human Expertise Loss

AI decreases and eliminates skilled workforce and jobs and it has the capability to take over the repetitive and manual work. You cannot undervalue and underestimate the significance of experience and knowledge.

Cybersecurity Risk

Chief Security Officer of Microsoft, Terence Jackson said that hackers are employing AI-based complex malware and viruses that are causing reputational risk, financial losses, and data breaches. A compromised system decreases the trust and confidence of valuable customers.

Low Transparency

AI data input could have errors and it requires data cleaning. Data analysts could choose the biased data sets and generate scenarios that are causing poor quality and visibility. Limited transparency would jeopardize strategic partnerships and the loyalty of customers.


Deep fake and other editing tools and applications are spreading misinformation, inconsistencies between fiction and reality, and lack of trust on social media. Misinformation and fake news made people rush into things and stock necessary supplies.

Example of AI in SCM

Zebra Technologies

Companies like Zebra Technologies are employing AI-based hardware, software, and data analytics to have real-time transparency into the loading process. The key insight helps the company to optimize the space utilization inside the trailer by decreasing the amount of airy area. Resultantly, Zebra helps other firms and businesses to quickly and less risky designs to efficiently process and manage protocols.  

Conclusion: Artificial Intelligence in Supply Chain Management 

After an in-depth study of artificial intelligence in supply chain management; we have realized that AI in SCM is highly beneficial for the growth of businesses and companies. If you are learning about the role of AI in SCM, then you should keep in mind the abovementioned elements, benefits, challenges, and examples.

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