AI in Supply Chain: Investments & Optimization

AI in Supply Chain: Investments & Optimization

This article discusses the growing trend of investment in AI in supply chain. Here we will also look at how supply chains, warehouses, and manufacturing facilities invest in technology. 

The Previous Story

Artificial intelligence still requires perfection. Moreover, technology has multiple business flubs. For example, in 2016, the Microsoft AI chatbot was memorized to be racist and sexist. However, AI is here to stay in the supply chain, in fact, it is expected that the prevalence will grow.

According to the MHI annual industry report, 17% of the respondents claimed that they are already using AI and another 45% said that they will be using it in the next five years. The survey was done with more than 1000 professionals in the supply chain around the world. It was also found that the plan is to invest in AI products in the next three years, according to 25% of them.

Ben Lynch, the director of business data analytics at the DHL supply chain, says AI is complex, but its use is very simple. He says people do not require a deep understanding of the algorithm and he thought he would never be able to move as quickly as that. Moreover, he said that it will only get better.


During the past five years, the relationship of DHL with its customers has been shifted by AI. Lynch said that the company went from giving the information to the customers for something that has happened already to something more predictive. He said that through AI machine learning and the availability of data, they can give them insights into everything that is going to happen and not just what has happened.

Furthermore, sophisticated algorithms have fueled the transition, which can handle the sheer data that has been collected.

Lynch said they are generating as much data as has been created every two years. He said that by 2023 they will have twice as much data in the world. Due to this, there has been a huge need for technology to help support this data.

AI is also allowing other types of technologies to advance in the supply chain, such as robotics, as per Thomas Evans, chief technology officer at Honeywell.

AI Investment

Thomas Evans said,

“The complexity and the way-quicker access to AI through third-party providers, and also the ability to build AI platforms and deploy them, is a drastic change and asset to supply chain logistics.” 

He added that it will get more advanced as they harness more data. However, AI is not a panacea for problems in a business. It has experienced pain while growing.

The most recent example is Microsoft’s chatbot ordeal. The online company for real estate Zillow shutdown Zillow offers, which is a home buying and flipper service that is AI-fueled. The company purchased houses that cost them higher while buying compared to how much they could sell them for. Moreover, the company had taken a $304 million inventory write-down during the third quarter of 2021. However, AI is effective and already paying off for the right use of cases.

The report by McKinsey found that for early adopters, the supply chain management by AI improved by 15% logistics; by 35% in inventory and the service levels improved by 65% in contrast to the slower-moving competitors.

The biggest gap that is seen by Lynch is adopting the simplification of data further and getting data or businesses to speak the same language.


Get registration and enrolled in our courses. Get your Diploma.

News & Events

Related Blogs


%d bloggers like this: