AI in supply chain and logistics
Abstract—This paper deals with the various
uses of AI in supply chain and logistics. It goes
over its uses in the industry today and the
various advantages and disadvantages it
provides
Keywords— Artificial intelligence, supply
chain, machine learning
I. INTRODUCTION
Artificial Intelligence (A.I) has achieved many
things that humans couldn’t even think of 50
years ago. The latest breakthrough in A.I field
was when A.I models helped researchers
analyze vast amounts of data about corona
virus so they could develop vaccines in few
months, which supposedly takes years to
develop. Along with Artificial Intelligence (A.I)
and Machine Learning (M.L) helping many
sectors grow, they have already begun to
change the face of supply chain and logistics
industry.
Many people feel that supply chain industry is
challenging yet a good paying one. Due to the
pandemic, the A.I indeed helps to establish a
good understanding of impact of Covid on
supply chains and helps the manufacturing
companies deal with uncertainties in the right
way to minimize losses. This paper will
predominantly discuss the influence of A.I on
supply chain, logistics and warehouses.
Moreover, this paper examines the pros and
cons of implementing this technology in these
sectors in these ongoing pandemic times.
II. AI IN SUPPLY CHAIN AND LOGISTICS
I. Artificial intelligence almost touches
every part of our life and industries.
Driverless cars don’t need human
efforts while robots dominate all the
jobs in amazon.
II. Machine learning continues to
improve customer experiences and
open countless doors to tech
industries including the supply chain.
III. According to researcher called
Gartner supply chain machines will
double its job in next coming five
years. As machine learning becomes
more complicated, tools may one day
be able to make better decisions than
even the most experienced supply
chain managers.
IV. Machines with predictive analytic
capabilities can make orders based on
a customer's order pattern, reducing
delivery time and making next-day
delivery too slow for some customers.
Amazon, Oracle, Salesforce, and GE,
among other major tech and supply
chain giants, are already positioning
themselves to gain from these
advantages.
V. Amazon is a clear leader in supply
chain sophistication, with 1,000
workers said to be working in artificial
intelligence. Furthermore, with
Amazon Machine Learning and
Amazon Echo, the e-commerce giant
is bringing AI to the public, changing
the lines of communication between
consumers and suppliers. The
information it collects assists in
determining demand at the individual
shopper level. Salesforce is the
newest tool to collect data about
consumer’s email, social media
accounts and gadgets to determine
the customer’s interest. Predicting
deliveries is not just about
manufacturing and making schedules
 about shipping. With smart supply
chain technology, companies can look
at previous data such as previous
delivery times, manufacture details
and weather report etc.
VI. According to a recent Forrester poll of
global decision makers, AI adoption in
SCM trails well behind marketing,
product management, and customer
service. Only thirteen percent of firms
say logistics is the department leading
or considering AI system investment
and deployment. Image recognition is
another common application of AI.
VII. Image recognition software helps with
inventory management. This
technology can save more time also
prevent from manual errors.
VIII. Target and Amazon have been testing
robots with a stereoscopic camera to
roam aisles and take inventory.
Walmart recently expanded a similar
pilot project to 50 stores. Retailers
think it is very important to have good
quality products and they also think
that this is directly connected with AI.
III. ADVANTAGES AND DISADVANTAGES
a. Advantages
Inventory management:
The main purpose of an effective inventory
management is to ensure the right flows of
items in or out of a warehouse. To be specific,
it involves some of the inventory operations
such as processing order, picking, and
packing. These operations, however, are
inclined to time inefficiency and high
possibility of errors. With Al’s ability to handle
mass data, we can bring an end to this
problem. In particular, the AI system can
analyze huge datasets, providing suggestions
on forecasting supply and demand to prevent
overstocking, inadequate stock and so on.
Operation cost:
AI turns out to be notably beneficial in
minimizing the operation costs in supply
chain. Generally, the automated intelligent
activities can operate with high productivity
and limited errors in every section from
warehousing to customer service. Moreover,
warehouse robots can perform with greater
speed and accuracy, resulting in high-quality
outputs.
On-time delivery:
In logistics business, each mile and second
matters. Customers want their products to be
delivered as fast as possible and AI can help
solve this problem. In specific, AI system can
replace the manual efforts with automating
operation. For instance, by analyzing
customer’s location, AI system maps out the
optimized pathway for the delivery drivers. As
a result, this accelerates the entire process
and facilitates on-time delivery to customers.
b. Disadvantages
Training costs: Training requires many
investments and can sometimes reduce
efficiency and impact the business. Effective
and affordable training strategies are still
being made to combat this.
Self-sufficient: AI is not self-sufficient. It needs
to be given inputs and controlled for it to run
smoothly and efficiently.
Mistakes: It is very difficult to spot an error in
the software. AI uses machine learning
algorithms; thus, its complexity increases over
time and makes it very difficult to identify
error.
Security: A large amount of sensitive
information about the company is used in AI.
Along with software costs a large amount of
money needs to be attributed to security of
the system. A security breach can cause
 massive damage to the performance of the
supply chain.

Overall cost: companies need to invest in

digital analytics tools before AI. While AI
implementations itself cost over millions
without proper analytic tool its will be
rendered ineffective and inefficient.

IV. CONCLUSION
As mentioned earlier, A.I is almost a new
concept in supply chain and logistics.
Therefore, it’s quite natural to get a mixed
reaction about it initially. Though this
technology is still in its early stages, it
certainly helps to improve the efficiency of
supply chain management. Once this tool is
affordable and accessible to everyone, it will
prove to have more benefits rather than
drawbacks and it will significantly help us to
achieve many more breakthroughs in this
industry.