Artificial Intelligence (AI) is being embraced by more organizations to improve efficiency and visibility. According to a recent EY study, organizations are increasingly deploying AI in supply chains for demand planning and procurement while testing its use in standardizing processes and optimizing last-mile delivery.
EY estimates that 40% of supply chain organizations are investing in Generative AI (GenAI) that focuses on knowledge management applications. GenAI, as defined by EY, “creates new content, such as numerical data, images, text, audio or video, based on data on which it has been trained.”
Meanwhile, McKinsey notes that over the next three years, 92% of companies plan to increase their AI investments. But, while nearly all companies are investing in AI, only 1% of leaders call their companies “mature” on the deployment spectrum, meaning that AI is fully integrated into workflows and drives substantial business outcomes.
Indeed, organizations should develop a clear AI integration strategy that aligns with their supply chain objectives. The first step is to identify pain points where AI can deliver the most value, such as demand forecasting, warehouse automation, route optimization, and other aspects of their supply chains.
Once the focus areas are identified, organizations should evaluate the growing number of AI solutions. Collaborating with AI technology providers can accelerate adoption while reducing the burden on internal IT teams. Furthermore, organizations must ensure that AI-driven initiatives align with their broader digital transformation strategies to maximize returns on investment.
But, perhaps even more difficult for organizations is encouraging workers to embrace it. Clear communication about AI’s role and benefits is crucial in alleviating fears of job displacement. In addition, organizations should foster a culture of continuous learning and encourage employees to think of AI as an enabler of innovation. By focusing on transparency, education, and engagement, organizations can cultivate a workforce that is ready and willing to leverage AI in supply chain operations.
As AI adoption increases, organizations must address ethical concerns and data security challenges. Companies should implement robust data governance frameworks to protect sensitive supply chain information and comply with regulations such as the General Data Protection Regulations (GDPR) in the EU and the California Consumer Privacy Act (CCPA) in the US.
Additionally, AI algorithms must be designed to minimize bias and ensure fairness in decision-making. Organizations should regularly audit AI models to detect and mitigate biases, ensuring that AI-driven decisions align with ethical business practices.
To maximize the benefits of AI in supply chain management, organizations should also establish key performance indicators (KPIs) to measure success. Metrics such as cost savings, on-time deliveries, and customer satisfaction can help businesses assess AI’s impact and make data-driven adjustments.
AI adoption is an ongoing journey and requires continuous improvement and refinement. Organizations should stay updated on AI advancements, collaborate with industry experts, and participate in knowledge-sharing initiatives to remain at the forefront of supply chain innovation.
According to Gartner, only 95% of data-driven decisions are partially automated. And yet, only 10% of CEOs say that their business uses AI strategically. Even fewer technology leaders, 9%, say their businesses have a clearly defined AI vision statement.
Organizations still have a way to fully embrace and implement AI into supply chains. However, more off-the-shelf cloud-based technology solutions and platforms are incorporating AI into their solutions to provide enhanced visibility, tracking, and forecasting.
These solutions can also be considered as a way to prove the effectiveness of AI and also an opportunity for workers to learn more about the benefits of AI.
In the coming years, AI technologies will continue to improve and become even more integral to supply chain operations. It will become increasingly vital for businesses to keep pace with the latest AI advancements and technology to stay ahead of the curve and not get left behind. As with any new technology, there may come some level of hesitation, but AI is being adopted across so many different industries and it is not likely to slow down. Adapting and innovating with these tools will be key for continued success. It is expected that these technologies will continue to improve and revolutionize the business world as we know it today.
Ship Angel is a cutting-edge rate management platform for BCO shippers, offering innovative solutions in rate management, amendment guard, invoice auditing, and sustainability reporting. Powered by AI, Ship Angel helps shippers manage rates efficiently, ensure contract accuracy, and optimize cost savings. With a commitment to transparency, Ship Angel works across industries to help companies avoid costly disruptions and stay ahead in a rapidly evolving global trade environment.