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The 7 Core Benefits of AI-Powered Supply Chains

by Shawn Mack
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The advancement of technology has revolutionized every facet of modern life. In the goods and services industry in particular, there has been remarkable progress.

High-tech innovation including artificial intelligence (AI) has made logistics companies and supply chains more productive by making operational processes faster, simpler and, most importantly, more accurate.

But before getting into the details of the role of AI in supply chain management, let’s briefly discuss: What is artificial intelligence? AI represents the ability of computers to accomplish jobs commonly associated with intelligent beings. Simply put, AI can perform tasks just like humans in terms of “software performance” but operates on much more powerful hardware. And unlike humans, AI machines can handle massive amounts of data in real time.

Let’s begin by discussing the advantages of automation and AI in supply chain management.

1. Systematic Inventory Management 

Accurate inventory management ensures the appropriate flow of items in and out of a warehouse. Because there are so many variables, like receipting, order processing, and picking and packing, it’s generally a very time-consuming job with a high tendency for error. Why does inventory management matter? Inventory management is extremely important for preventing overstocking, inadequate stock and unexpected stock-outs.

With their ability to handle mass data, AI systems are a major asset in effective inventory management. These intelligent systems can analyze and interpret huge datasets quickly, offering timely and accurate guidance on forecasting supply and demand, particularly in light of recent world events.

Moreover, AI systems with intelligent algorithms can discover consumer habits. Researchers have been testing AI for years to predict trends and forecast seasonal demand. This application of AI  can help companies anticipating future customer demand trends while minimizing the costs of overstocking unwanted inventory. 

2. Warehouse Efficiency

A properly functioning warehouse is an essential part of the supply chain and  customer satisfaction. Automation can assist in the timely retrieval of an item from a warehouse and smooth its journey to the customer. 

AI systems can address a variety of warehouse issues—more quickly and accurately than a human can—while simplifying cumbersome procedures and speeding up work. 

Cin7’s March 2020 release of Automation Bots is one such example of smart technology. Cin7 Founder Danny Ing developed Automation Bots in response to a growing need for businesses to spend more time on building brand equity and future sales rather than simply scrambling to fill open orders. 

For this first batch, Ing chose six commonly used processes to automate, including batching eCommerce orders and sending sales order emails. To boost warehouse efficiency, the release also features automated branch replenishment. In the coming months, Cin7 will roll out Automation Bots for dropship purchase orders, production jobs, sales order updates and other workflows. 

In addition to giving businesses back valuable time every day, automation efforts can significantly reduce the need for, and cost of, warehouse staff. 

3. Improved Safety

Automated systems ensure smarter planning and better warehouse management, which in turn improves worker and material safety. AI can analyze workplace safety data and inform operators of any risks. It can also record stocking parameters and update operators accordingly. With all these feedback loops and proactive maintenance, businesses can react swiftly and decisively to keep warehouses secure and compliant with safety standards. 

4. Better Customer Service

Nowhere has automation had a bigger impact than on customer service. Consumers have grown accustomed to online, interactive Conversation interfaces, or chatbots, which  are now de rigueur on eCommerce websites. A March 2019 study found that 54% of service organizations use or expect to use chatbots within 18 months—a staggering growth rate of 136%. But it’s not just customer expectation that’s fueling this growth. Chatbots provide many business benefits, including increased customer satisfaction and brand loyalty as well as reduced transaction cost and sales cycle time.

As customer service agents, AI-powered chatbots are available around the clock and can reply to up to 80% of routine questions, saving money on customer service costs and speeding up response times. Even better, chatbots continue to learn through AI, becoming smarter with each conversation.

Customers are more likely to interact with a chatbot than a human employee for routine transactions such as placing orders and similar requests. Chatbots can also provide a surprising complexity of answers regarding order and shipment status, prices, stock availability and supplier status. 

5. Reduced Operational Costs

One of the major advantages of using AI systems in logistics is reduced operational costs throughout the supply chain. From customer service to the warehouse, many operations are now automated, with intelligent machines replacing employees. Furthermore, these machines can operate error-free for a longer duration, reducing the number of mistakes and workplace incidents.

Warehouse robots such as those used by Amazon work with greater speed and accuracy than a human can. The robot receives the order then locates, picks and packs the desired goods per instructions, achieving higher levels of productivity.

6. Ability to Predict Industry Trends

The best part of AI systems is that they learn from each transaction, be it client interaction via chatbot, emails, text messages or user feedback. AI systems keep can keep complete records and continually analyze data against  a customer’s requirements, updating specified users of the results. In this way, business owners can effectively plan for future customer needs by taking timely action driven by data.

7. Timely Delivery

AI systems make logistics simpler and more accurate, facilitating timely delivery to the customer. Automated systems accelerate warehouse procedures, and the more sophisticated ones can even take into consideration factors like traffic conditions, delays, alternate routes and weather forecasts.    

With so many variables, supply chain management is a complex business that benefits greatly from the adoption of AI systems to boost productivity and enhance customer service. From streamlining cumbersome warehouse procedures to providing quick order updates without the need to make a phone call, automation is the wave of the future. 

About the Author
Shawn Mack is a content writer with a background in business and technology. He enjoys writing about digital marketing and occasionally guest blogs for Coast
.