AI and Supply Chain Operations: 5 Ways Logistics Companies Are Using Artificial Intelligence

Companies are rapidly integrating artificial intelligence (AI) into their supply chains to streamline efficiencies, inform decision-making, reduce costs, and improve safety. The widespread adoption of AI in supply chains is projected to drive substantial growth in the market, whose value should exceed $41 billion by 2030. Supply chains that use AI have proven to reduce risks and optimize costs by over 67%, so it’s no surprise that about two-thirds of supply chain organizations already use this technology to improve operations.  

Emerging technologies are reshaping supply chains and creating a wide range of new supply chain jobs. As companies look for new ways to incorporate these technologies, the need for supply chain professionals with expertise in these tools should increase. This article explores industry advancements and explains how organizations use AI to optimize supply chain operations, highlighting some areas where new career opportunities should emerge.

Getting Real-Time Insights with AI

AI technology provides decision-makers real-time insights to improve supply chain efficiency and enable faster, better-informed decisions. For example, AI can monitor equipment in real-time to predict when maintenance is needed, reducing downtime in warehouses. It can also track productivity and deadlines, ensuring resources and labor are aligned to meet demand effectively.

In logistics, companies can use AI solutions to monitor loading processes in real-time, track deliveries and identify bottlenecks as they occur. Decision-makers can use this real-time information to spot inefficiencies that could lead to delayed deliveries and increased costs, enabling them to make adjustments to keep deliveries on time.

Using AI to Optimize Routes

AI has use cases across the entire supply chain, including at the delivery level. Transportation and logistics companies use AI technology and predictive analytics to help with route planning to enhance productivity and decrease costs. By analyzing factors like traffic, weather, and transportation networks, AI helps companies find the fastest routes, saving time and money. AI can also maximize cargo space to ensure trucks are loaded as efficiently as possible to save on fuel.

With the increased use of AI in supply chains, many software providers have developed tools that use AI technology to help transportation and logistics companies plan and optimize routes. These applications highlight the need for professionals who understand how to incorporate AI into supply chains across various fields, including IT.

Forecasting Accurately With AI

In today’s global economy, businesses must navigate constant supply chain challenges. Inaccurate forecasts can lead to financial loss, wasted resources, missed opportunities, and a damaged reputation. By analyzing historical data, market trends, and seasonal fluctuations, AI can forecast demand and help businesses make informed decisions when it comes to production planning and inventory management. This, in turn, helps businesses optimize their inventory levels and reduce the risk of running out of inventory or overstocking. According to McKinsey, AI forecasting helps businesses decrease errors by 20–50%.

Along with forecasting, businesses use AI to predict stock shortages. AI relies on machine learning to spot patterns in past data and figure out when inventory might run low. This helps companies stay ahead of potential shortages, keeping things running smoothly and avoiding disruptions. AI demand forecasting can also track pricing trends, letting businesses stock up on items likely to get more expensive and avoid overloading on items that might drop in price.

Implementing AI for Supply Chain Automation

How quickly is AI becoming part of everyday business? By 2025, 95% of data-driven decisions are expected to involve automation. Businesses can use AI in supply chains to manage tasks that make operations more efficient, accurate, affordable, and safe. For example, AI can automate routine jobs like billing, ordering or invoice processing, giving employees more time to focus on bigger priorities. This kind of automation helps save time and money while cutting down on mistakes.

AI can help businesses automate tasks like managing inventory, overseeing warehouse operations and tracking shipments. It can automatically reorder supplies, adjust delivery schedules, and even manage stock levels. In warehouses, AI-driven robots can take care of tasks requiring strength, precision or endurance, such as sorting, packing, and loading. This makes operations more efficient, reduces errors, and ensures a safer work environment.

Assessing Supplier Risks with AI

Suppliers play a key role in a business’s supply chain, so it’s important to evaluate current and potential suppliers to ensure they are reliable and can meet operational standards. By looking at things like past performance, financial stability, and compliance with laws and regulations, AI helps businesses spot potential supplier issues so they can make adjustments to their supplier network before major problems arise. 

AI can also track emerging threats that could affect suppliers, such as geopolitical instability or natural disasters, allowing businesses to proactively seek out alternative suppliers and avoid disruptions in their supply chain. Using AI to assess supplier risks helps businesses mitigate potential inefficiencies, unexpected costs, and legal issues. 

Offering Transparency with AI

Some companies find value in using AI for visibility and transparency in their supply chains to oversee, track, and enhance transparency in production, distribution, and procurement. AI technologies can help companies better understand their supply chains and collaborate with suppliers to avoid roadblocks. AI can also help companies adapt to changes more efficiently, minimizing disruptions and reducing inefficiencies.

Leveraging AI for visibility and transparency also helps sustainability efforts by providing businesses with greater accountability. AI’s ability to provide real-time tracking of goods throughout production provides decision-makers with up-to-date information at every stage of the supply chain. This visibility helps companies identify inefficiencies and potential risks before they turn into major issues. AI-derived insights into the environmental impact of sourcing, manufacturing, and transportation lead to more sustainable, efficient, and adaptable systems that increase profits while supporting sustainability.

Prepare for AI-Powered Supply Chain Jobs with an Online Master’s Program

Knowing how AI ties into supply chain operations is key for businesses that want to stay competitive by improving efficiency, reducing costs, remaining adaptable, and promoting sustainability. The top-ranked University of Tennessee (UT), Knoxville’s Master of Science in Supply Chain Management Online (MS SCM), prepares students for a broad range of career opportunities in modern supply chain jobs.

The flexible program format of the MS SCM Online allows students to pursue their degrees online (with options to study full time or part time) and complete the program in 18-24 months. The program offers a practical, industry-relevant curriculum that provides students with the strategic insights and knowledge to succeed in the modern global economy. 

Students have the opportunity to work on a capstone project where they can apply everything they’ve learned in the program and how the supply chain creates value. They also participate in a three-day on-campus immersion experience, where they meet classmates and program faculty, improve their leadership skills, and build connections with supply chain professionals. Throughout the program, MS SCM Online students receive personalized support from a dedicated student success coach and regular faculty office hours.

Get Started Today: Apply Now or Request Info

The supply chain industry is evolving at a rapid pace. If you’re ready to explore how emerging technologies are shaping its future and advance your career in the field, start your application for UT’s MS in Supply Chain Management Online. If you’d like to request more information about the program, contact an enrollment advisor for personalized guidance.