• Industry 4.0 / IIoT
  • Inventory Management
  • Supply Chain

Artificial Intelligence in the Supply Chain

Written by Robert Brice
August 1, 2016

Artificial intelligence is making its way into supply chain management.

Artificial intelligence is making its way into supply chain management.

Artificial intelligence is becoming the way of the world. At first, the concept sounds like a science fiction story. The term refers to computers that can think for themselves like humans. Simply put, artificial intelligence is the product of ever-advancing technology, and acting as humans do means these devices have capabilities like speech-recognition and decision making. It can benefit just about every industry, and supply chain management is no exception.

The Growing Trend of Artificial Intelligence

Artificial intelligence has increasingly made its way into the supply chain – and for good reason. The Technology Vision 2016 survey from Accenture noted that artificial intelligence allows supply chains to automatically link together, creating the perfect solution to productivity and efficiency.

Some companies have already taken advantage of this trend. For example, the German company Siemens has created what it calls a “lights out” manufacturing plant. Essentially, Siemens has leveraged artificial intelligence to the point that the factory can run for weeks without humans supervising. To be sure, this is not totally replacing human jobs – the Siemens building still requires the help of 1,150 employees. However, it demonstrates the possibilities for connectivity and innovation in the supply chain.

As The Financial Express explained, supply chains need artificial intelligence to aggregate their mass amounts of data. In fact, integrating artificial intelligence is perhaps the only way to address the complexity of the supply chain. This type of technology can meet customer demand for speed while also adapting to change and reacting to future scenarios.

Inventory Management

Artificial intelligence impacts every part of the supply chain, including inventory management. In fact, Nucleus Research determined that artificial intelligence is what sets apart inventory optimization leaders. Based on the 2015 Technology Value Matrix for Inventory Optimization report, Nucleus Research found that inventory management vendors who use artificial intelligence can better spot patterns and more quickly addresses issues that arise in the supply chain.

“Our latest value matrix shows early leaders in this category embracing artificial intelligence as a powerful way to differentiate their offerings and deliver better solutions,” Nucleus Research CEO  Ian Campbell said. “Vendors that ignore this trend risk losing market share to savvier artificial intelligence-enabled applications.”

Nucleus Research also noted that cloud-based solutions offer benefits of flexibility and efficiency.


Another key element in the supply chain, logistics, is not immune to the reach of artificial intelligence. The Financial Express noted that DHL embraced automation with its use of self-sufficient forklifts. With the addition of data collection, these types of forklifts could know what products need to be moved where and at what time.

Meanwhile, self-driving vehicles reveal yet another place for artificial intelligence. Logistics may be quite a ways off from having fleets of driverless trucks, but many automobiles already have autonomous elements. For example, consider self-braking features that sense when another car is too close for safety. Many vehicles also have connectivity devices with speech-recognition technology. Drivers only need to plug in their smartphones and say “call Bill” to make a call.

The Role of Data Collection in Artificial Intelligence

Artificial intelligence tools can only make predictions and decisions if they have enough information. That is why data collection is such a crucial part of integrating artificial intelligence into supply chain management.

There are plenty of ways businesses can optimize their data collection strategies; they just need more advanced tools to match the complex picture of supply chain management. Wearable technology is a great place to start.

WHITE PAPER DOWNLOAD: Making the Case for Wearable Tech in the Warehouse, and learn how the demand for speed is one of the main drivers for this trend »

After all, customer demand for faster and better requires companies to make efficiency a priority. Wearable technology addresses this need by making tasks hands-free. For example, when using a traditional barcode scanner, workers have to grab the product, pick up the scanner, scan the code, put the scanner down and replace the item. Wouldn’t it be much quicker for an employee to swipe his or her wrist past the code instead of moving objects around?

Statistics back up the effectiveness of wearable technology. According to the white paper, employees at Active Ants, a Dutch e-fulfillment company, performed 15% faster when using Google Glass smart glasses to run a custom-developed application. Meanwhile, error rates dropped by 12%.