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8 Ways You Can Use AI for Supply Chain Management

AI is the must-have technology to improve the efficiency of your supply chain. But precisely where to leverage the technology is still a question for many. The supply chain is complex and has various areas and subareas. Every optimization and system is only for improving a particular area rather than an end-to-end process.

8 Ways You Can Use AI for Supply Chain Management

AI focuses on the latter and its impact reflects on every sub-function of the supply chain which is crucial for your business. We are mentioning ten different areas (broad and sub-area) where you must use artificial intelligence for effective supply chain management.

Where to Use AI on Your Supply Chain Map?

Area No. 1: Warehouse/Inventory Management

Supply chain managers often struggle to keep up with the stock-keeping units (SKUs) in the warehouses. Whether in proximity or miles away, not having clear visibility of the warehouses is like shooting in the dark for them.

An AI tool can give real-time reports on your warehouse by capturing records from each shelve. By combining IoT sensors, RFID, and barcode scanning with artificial intelligence, warehouse tracking becomes even more accurate and instant.

Area No. 2: Supplier Selection & Management  

From finding the right supplier, evaluating accurate materials needs, and engaging in favorable negotiations, to contract management, everything you do at this stage affects the later one.

AI-driven systems help you make positive decisions for all these activities. By combining diverse sources and analyzing historical transaction data, market trends, and pricing dynamics, AI leads to cost-saving opportunities and improving supplier partnerships.

Area No. 3: Delivery & Shipment Tracking

The product is ready, and available at the warehouse, the order is placed, and the packet is dispatched, yet you miss the SLAs.

Ensuring delivery within the defined time window is one of the biggest challenges in the supply chain. Poor weather conditions, traffic, and unexpected vehicle part failure; all could be the reason behind delays.

AI can add speed to the delivery operation by finding the safe and fastest routes for vehicles. Not just drivers, it also helps supervisors and customers to track their orders. With this real-time tracking and route optimization, you can save on cost and earn greater customer satisfaction.

Area No. 4: Quality Check 

The production line is a busy route with so many drivers impacting the quality. Keeping a tab on the product’s quality at each stage is exhausting and efficient as minute errors are overlooked.

Automate quality checks with AI-powered systems. They run on computer vision technology to deep scan the products not only at the end stage but also during the production process. It can identify even the minute errors and cracks that the human eye cannot detect.

BMW, the luxury car manufacturer, uses computer vision technology in their assembly line to check the quality of their car models.

Area No. 5: Price Optimization

Your sales depend on whether you are producing the right product and selling it at the right price or not. Getting this right is however tricky because a lot of research and analysis is involved.

Here are a few areas where you can use AI for price optimization.

  • To understand the market and product demand.
  • To keep an eye on competitors to offer competitive pricing and discounts to gain more customers.
  • To know the peak hours and seasons when people are willing to pay more.

Area No. 6: Load Planning

If you are dealing with large volumes of cargo and complex logistics, load planning is the most important and complicated task. Manual calculations and estimations can lead to mistakes in weight distribution, space utilization, or overlooking weight restrictions. These errors can result in safety hazards, damage to cargo, and fines.

AI can transform how you pack your trucks and trailers, leading to a smoother, more efficient supply chain. It analyzes vehicles and products to efficiently distribute weights preventing them from falling out of weight restrictions.  

Area No. 7: Failure Detection

Imagine what if machines in your factory stop working unexpectedly. The amount of loss and expense it would bring will be enough to push you years back.

By using AI in the supply chain, you can skip such situations. Combined with a human supervisor and IoT, AI predictive maintenance systems can monitor the true health of your machines and vehicles.

It even keeps tabs on every particular component or part that is important to run the machines. This makes repair and maintenance scheduling easy and more cost-effective than conventional methods.

Area No. 8: Supply Chain Communication

Data and communication silos are common in factories scattered around the globe working separately and using different systems.

These systems with key information get stuck on one making it hard to see the big picture and keep everything running smoothly.

AI can bring different systems together for efficient communication between human humans and human machines. It also helps in data sharing and visualization to identify gaps and opportunities for your business.

This way everyone, from supply chain managers to dealers and customers, will know what’s happening behind the scenes.

Ready to Get AI Solutions for Supply Chain Management?

Though these applications of AI in supply chain operations sound impressive, getting it done right is easier said than done. Without a technology partner who is an expert in artificial intelligence and its supportive technologies, you will not get its real benefits. You also need to assess specific areas and current challenges you are facing to implement AI.

Also, decide to what extent you need technology support because your supply chain cannot run entirely on machines. You need human power to run ground-level and complex operations.


The entire supply chain operation needs transparency to save costly expense-whether on management or shipments. By using AI in the supply chain, you can achieve that transparency along with managing, and improving each operation. Use AI in conjunction with human power to get the most out of this technology and achieve supply chain excellence.

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