The logistics sector is under tremendous pressure to deliver items more quickly and effectively in an economical way in today’s fast-paced world. With the advent of many softwares and technologies, firms have benefited profoundly from one such well-known technology. Any thoughts on what technology we have been speaking about ? Indeed it is AI or Artificial Intelligence.
According to PRNewswire(1), With a projected valuation of USD 1713 million in 2023, the global AI supply chain and logistics market is expected to grow at a CAGR of 10.1% from 2024 to 2030, reaching USD 3377.2 million. Thus it becomes obvious that AI has opened doors for more intelligent and dynamic logistics operations, from predicting delays to optimizing delivery routes.
How has AI impacted the logistics sector? What benefits have been reaped by companies using AI to increase customer satisfaction and streamline operations? Read along to know how AI is transforming route planning and building effective logistics networks.
How AI in Supply Chain Management Has Enhanced Efficient Logistics & Route Planning
1. AI-Driven Route Optimization
Route optimization, which relied on manual computations based on variables like distance, traffic patterns, and road conditions, has been revolutionized by AI. These techniques were frequently laborious and prone to errors. Now, AI makes it possible to analyze enormous volumes of data in real-time and identify the most cost- and time-effective methods.
AI systems are capable of absorbing real-time meteorological and traffic data, dynamically changing routes to minimize delays. Furthermore, by examining past data, AI can forecast future road conditions, giving logistics managers the ability to proactively create effective routes. Additionally, higher fuel efficiency results from optimized routes, which lowers transportation costs and has less environmental impact.
2. Enhanced Demand Forecasting for Efficient Logistics
Demand forecasting, a vital aspect of effective logistics management, has been greatly enhanced by AI. AI accelerates this process by evaluating data from multiple sources, including market conditions, consumer behavior, seasonal patterns, supplier management, and even social media trends.
Given this, AI can predict demand spikes and dips with greater accuracy, which helps firms manage their inventories more effectively. AI-powered Invensure businesses have the appropriate inventory in the proper places, lowering the possibility of overstocking or stockouts.
This improved inventory management immediately impacts logistics since it guarantees that supplies are made by real demand, cuts down on needless transportation, and lowers expenses.
3. AI-Enabled Supply Chain Visibility
Supply chain visibility is another important area where AI is having a big influence. Real-time tracking and monitoring of the flow of goods is essential for spotting inefficiencies, guaranteeing on-time delivery, and controlling interruptions. Logistics managers may access real-time data on the location and condition of shipments with the use of AI-driven technologies that are coupled with IoT devices.
Businesses may better manage their logistics operations by reducing delays and guaranteeing more seamless supply chain procedures due to AI’s enhanced visibility.
4. AI and Sustainability in Logistics
Supply chain management is becoming more concerned with sustainability, and AI is a key tool in assisting businesses in achieving more environmentally friendly logistical operations. AI-powered tools assist businesses in minimizing their carbon impact by optimizing routes and cutting fuel consumption.
AI also eliminates waste in the supply chain by reducing overproduction and optimizing inventory levels. The increasing emphasis on sustainability is fueled by customer demand for environmentally conscious company practices as well as legislative constraints.
A Fortune 500 telecom company’s extensive global warehouse network and diverse SKU usage patterns made it challenging to maintain ideal inventory levels. As a result, the CAPEX was enormous.
Using GeakMinds’ approach, the demand for each part was estimated by looking at past consumption trends. Any sizable new order that might be placed in advance and taken into consideration also had an impact on demand.
Network planners can now examine all inventory-related KPIs, AI models, and daily stock levels that were created in conjunction with them. This reduced overstocking and enabled proactive measures to limit understocking through effective monitoring and recommendations to attain a Just-In-Time Inventory.
Businesses that use AI-powered logistics solutions will be in a better position to meet these demands, building their brand and increasing productivity at the same time.
Conclusion
AI is transforming logistics, from autonomous delivery systems and predictive analytics to real-time route changes. Businesses will gain from greater productivity, lower expenses, higher satisfaction among consumers, and enhanced sustainability as more adopt these technologies. Now, the question is: Are you prepared to use AI to improve the efficiency of your supply chain operations?
Book a demo with GeakMinds and take a step ahead in your SCM platform with our AI-enabled capabilities.
Reference Link:
- https://www.prnewswire.com/news-releases/artificial-intelligence-ai-in-supply-chain-and-logistics-market-size-to-grow-usd-3377-2-million-by-2030-at-a-cagr-of-10-1–valuates-reports-302197015.html