Key Takeaways

• Optimize your supply chain by leveraging AI to improve demand forecasting, resource allocation, and supplier discovery, giving you a competitive edge in efficiency and cost savings.
• Implement AI solutions by integrating them into existing systems, such as inventory management and supplier selection, to streamline processes and enhance operational resilience.
• Enhance your business’s social and environmental impact by using AI to promote sustainability and equity in your supply chain, such as identifying diverse and reliable suppliers.
• Explore how companies like Amazon and Siemens are revolutionizing their supply chains with AI, from AI-powered robots to supplier discovery platforms, to uncover innovative strategies for your own business.

Since then, we’ve witnessed AI solutions and applications spread like wildfire across a broad range of industries. One of the fields that has been touched by this disruptive force and where adoption levels for AI have seen a notable surge is that of supply chain management.

AI in supply chain management in numbers 

Recent data shows that a growing number of companies in different sectors are either already using or looking to implement AI tools and systems to optimize operations and build more resilient supply chains. According to market research firm IDC, 55% of Forbes Global 2000 Original Equipment Manufacturers (OEMs) are expected to integrate AI components into their service supply chains by 2026. 

A report by Market.us also indicates that the global AI in supply chain market is estimated to grow at a CAGR of 42.7% in the years to come and reach around USD 157.6 billion by 2033, which is a significant jump from the 2003 valuation of USD 4.5 billion. So far, North America has been leading the charge in the AI in supply chain management market, with a 37.9% share, most likely due to the region being among the first to embrace cutting-edge AI technologies and make large investments in this field. 

The reason we’re seeing AI gain more ground in the supply chain management sphere has to do with its ability to address key points of concern such as demand forecasting, resource allocation, supplier discovery, risk reduction and cost savings. For example, AI can help a food production business predict demand fluctuations based on historical data, but it can just as easily take over the task of sifting through a long list of potential suppliers and help them choose a reliable cocoa manufacturer to ensure they use only use high quality sustainably sourced ingredients for the goods they produce. With companies worldwide looking to boost efficiency and productivity and lower costs, the trend is anticipated to amplify and expand to other areas across the globe. 

This goes to show that AI is no longer a fringe technology that only a handful of organizations leverage for its automation capabilities but a widespread innovation that can spark large-scale changes, transforming how supply chains will function in the future. 

Learning from the big players 

AI’s use cases are diverse and expanding rapidly, giving companies the possibility to use the technology to improve different processes and procedures in their supply chain management. Large companies, in particular, with access to vast resources, have successfully incorporated a variety of AI-based solutions into their structures with amazing results, and their example could inspire many others to do the same. 

Amazon 

E-commerce giant Amazon offers a prime example of AI applications in supply chain management. As the company that has set the standards in online retail, Amazon has a reputation of operational excellence to uphold. To ensure a streamlined fulfillment process and keep customers satisfied with their services, they’ve built a highly efficient inventory management system where AI plays a key role. 

The retailer employs advanced AI algorithms to analyze the vast amount of data it collects from different sources and identify patterns and trends so they can anticipate future demand. This helps them ensure that the products their customers require are always on stock and ready to get shipped to their destination in no time. 

Another way Amazon leverages AI’s power is by introducing AI-powered robots in their warehouses to handle a wide range of tasks, from storage to picking and packing items. AI is also involved in the selection of the best routes for fast delivery by analyzing factors that could affect transportation, such as weather conditions, traffic patterns, or road closures. 

AI is equally helpful in monitoring equipment performance, spotting potential issues before they occur and ensuring all tools and systems operate smoothly, thus reducing downtime and the disruptions caused by it. 

At the customers’ end, Amazon’s AI-powered chatbots assist with inquiries, being able to provide real-time responses and address all sorts of issues promptly and efficiently.  

Siemens 

Unsurprisingly, German multinational technology conglomerate Siemens is also making use of AI to improve supply chain operations. The company partners with Berlin-based start-up Scoutbee and utilizes its AI-powered Supplier Intelligence and Discovery Platform to find alternative suppliers quickly whenever they’re dealing with a shortage, as was the case when they had difficulties sourcing Surlyn, a specific type of resin produced by DuPont and used in the packaging of medical diagnostic products. Scoutbee was able to compile a list with 150 different Sulyn manufacturers in a matter of days, thus helping Siemens overcome a major supply chain disruption.

Unilever also resorts to Scoutbee’s AI solutions to create a more diverse and equitable supplier base and achieve its sustainability goals as many of the providers identified by the software are small and medium-sized enterprises (SMEs).

Walmart 

In Walmart’s case, AI technology is present through the company’s large language models (LLMs) in its chatbots and virtual assistants. This allows the American multinational retail corporation to deliver excellent customer support around the clock and deliver a superior experience to all its clients. 

Walmart also uses an AI-powered software called Pactum AI to streamline negotiations and facilitate agreements with its over 100,000 suppliers, many of which they wouldn’t be able to reach without this tool. 

However, it’s not just corporations that are taking advantage of AI’s potential to make a positive change in how their supply chains run. The trend is noticeable across all industry levels. Forward-thinking suppliers like ofi, short for olam food ingredients, are also jumping on board, embracing AI technology to stay up to date with market trends and accelerate sustainability efforts via projects like AI-powered BeeHome or AI Palette. 

AI has already proven its transformative power in numerous domains, and its increasing relevance in the supply chain landscape promises to open up new opportunities for businesses looking to take their operations to the next level.