How is AI transforming the logistics industry?

Logistics & Supply chain management is a multi-billion dollar industry. The logistics network has simplified easy cross-border trade. The sector, like many other industries, is undergoing rapid digital transformation.

It has adopted many new-age technologies, Artificial Intelligence being one of them. Artificial Intelligence (AI) has made operations management seamless, making the logistics industry efficient and the process smooth.

According to a study in Gartner, 61% of respondents said that technology is a source of competitive advantage. Hence it is critical to invest in emerging technologies. 

Benefits of AI in the supply chain & logistics industry – 

“Supply chain is in the crawling stage of using artificial intelligence. In the next 5 years, AI will revolutionise the supply chain in ways most people haven’t even thought of yet.” – Dave Waters.

  • Predictive Analytics – Did you know that during the festive season, e-commerce giant like Amazon closely studies past data to understand the demand? It predicts which location will demand which product during the site-wide sale. 

It allows Amazon to plan their inventory in advance and ensure enough stock to match the demand. AI algorithms use historical data to predict market trends and customer behaviour and forecast future demand more accurately. 

It makes the prediction faster and can compute large amounts of data within seconds. It helps to draw more accurate and fact-based conclusions.

  • Route optimization – A report states that ships had to wait more than 75 days in the dockyard due to a lack of planning and overbooking. AI can help overcome such issues by finding the best sea, land, or air routes. It assesses the best path based on traffic, weather conditions, distance, vehicle capacity, medium of transport, and number of stops. It reduces fuel consumption, improves delivery time, and saves costs.
  • Automation in warehouse management – Global e-commerce stores like Amazon or Ikea use AI and robotics to automate warehouse functions. With computer automation & AI, activities like picking, sorting and packing become smooth and efficient. Automated warehouses have proved helpful for same-day delivery or the Q-commerce industry. Q-commerce companies like Zepto, Blinkit, and Dunzo can deliver products within minutes due to AI and computer automation.

Implementing AI also aids in inventory management. AI systems detect inventory levels and alert the manager when the stock is low. It also predicts the optimal inventory level for the forecasted demand.

  • Risk Management – International trade can become challenging due to changes in trade policies, inter-country relations, political unrest, or environmental factors. Internal risks include inventory shortages, delays in shipping, etc. All these risks can be predicted by analysing the data and identifying patterns or trends. It can help to plan ahead of time and reduce the losses.
  • Customer relationship management – AI-based CRM tools, like chatbots or virtual assistants, enhance the user experience. The AI tools can handle customer queries or address grievances in real-time. Natural language processing helps to respond to customer queries effectively, improving customer service.

AI helps in demand forecasting, reduces supply chain costs, enhances the delivery experience, creates a better & efficient supply chain network, and creates a seamless supply chain.

According to the Gartner report, more than 75% of commercial supply chain management application vendors will deliver embedded advanced analytics (AA), artificial intelligence (AI) and data science by 2026.

Thus, it is safe to say that AI is disrupting the way the logistics & supply chain industry works. Understanding these trends is essential to stay relevant and ahead of the competition.

How does MITSDE help you upgrade your skills and teach you AI-driven decision-making skills?

MIT School of Distance Education is a distance learning institute approved by AICTE, Govt. of India.

MITSDE offers a 21-month Post Graduate Diploma in Management course for working professionals. The PGDM in Logistics & Supply Chain course covers the basics of Supply Chain Management (SCM) and risk management strategies. It imparts people management skills, ethical decision-making skills, and updates on the latest logistics & supply chain trends.

The PGDM course is one of the top PGDM in Logistics & Supply Chain courses in India since it is bundled with an international certificate in Lean Six Sigma (Green + Black Belt).