The use of Artificial Intelligence in the supply chain is expected to stay and create huge waves in the coming years. According to Gartner, supply chain organisations expect the level of automation in their supply chain processes to double in the coming five years. Global spending on IoT platforms is predicted to grow from $1.67B in 2018 to $12.44B in 2024, attaining a staggering 40% compound annual growth rate (CAGR) in seven years.

In the present digital world, increasing productivity by reducing uncertainties is the priority in the industry. Furthermore, the rising expectation of supersonic speed and operational efficiencies further highlights the necessity to harness the power of Artificial Intelligence in the supply chain industry.

AI in India

India has witnessed magnificent AI adoption growth for the last few decades, with the highest AI adoption rate of 45%, even during the pandemic. According to a data by World Economic Forum, AI expenditure in India increased over 109% in 2018, totalling $665 million and it is expected to witness a CAGR surge of 39% in 2025, reaching an astounding amount of $11,781 billion, adding $1 trillion to India’s economy by 2035.

The Indian government’s NITI Aayog has proposed a focused approach to ensure the involvement of the public sector in AI adoption in specific priority sectors such as agriculture, healthcare and infrastructure etc.

Along with the other industries that the pandemic has transformed, logistics has demand. As a result, various domestic tech start-ups and SaaS companies are stepping forward for AI adoption to provide better add-ons to supply chain and logistics solutions for enterprises across India. 

AI and supply chain

Speed in decision-making. Speed in reducing the cycle times. Speed in overall trade development. The use of Artificial Intelligence in supply chain management is making history. The quick adoption of AI & ML has immensely contributed to the surge in production and smooth supply chain establishment. With a sudden increase in demand for Indian goods globally and the increased consumption of the e-commerce ecosystem, the need was established for an efficient supply chain process which was later intensified during the pandemic.

AI will play a significant role in automation and providing accurate insights in a short period, enabling more smart business decisions with an effort to bring down the logistical costs that are currently 14% on par with the world. The better implementation of a robust AI application is expected to not only strengthen India’s trading ecosystem but also boost the economy on par with the global supply chain standards.

Given below are a few of the effects of AI in industry.

• Cost efficiency

Along with boosting efficiency and ensuring no error operations, AI in the supply chain also decreases costs by reducing the manpower in the process. Thus, the resource wastage caused by human error is resolved. This paves the way for a gradual and long-term reduction in the need for working capital which helps in making more profit in the business and helps the manufacturers to sell their products at competitive prices.

• Inventory management efficiency

Inventory management has become a major challenge for manufacturers nowadays. Manually maintaining the inventory parallelly keeping an eye on the track of all items and raw materials used needs a lot of attention and effort. At the same time, they are prone to errors as well. Here the application of AI can help the manufacturers in automating the entire process by identifying the item stocks, generating real-time orders and maintaining a better stock every time as demand increases. It will help them reduce excess downtime in the business.

• The timely delivery

Reducing the human intervention itself makes the process swifter. Each second is more valuable in a world which demands quick deliveries and real-time updates than any other factor. Therefore, the process of automation aids in saving valuable time that is spent on unnecessary tasks and thus speeds up the work.  

In a country like India, it is essential to establish a robust end-to-end technologically driven supply chain and logistical system in order to arise as a top logistical hub in the world. As AI frequently revives the traditional way the supply chain industry works, successfully implementing AI technologies will be a game changer for the Indian economy.  

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