7 Ways Artificial Intelligence is Mitigating the Supply Chain Troubles 

Supply chains are complex systems that involve various parties and processes to ensure the smooth flow of products and services from manufacturer to end-users. However, disruptions to the supply chain can occur due to various reasons, such as natural disasters, economic uncertainties, and pandemics. 

These disruptions can cause significant distortions in the supply chain, leading to inefficiencies, delays, and increased costs. Supply chain distortions are becoming less of an issue as businesses use AI these days. 

AI-powered supply chain management solutions can help organizations improve their supply chain resilience by providing real-time visibility into the supply chain operations, predicting potential disruptions, and enabling proactive decision-making. 

However, according to Deloitte’s annual MHI Industry Report, only 15% of businesses will utilize AI in their supply chains by 2022. That is supposed to increment to 73 percent in the following five years. According to experts, the absence of a clear business case has hindered AI’s wider adoption.

As the importance of a resilient and efficient supply chain grows, organizations are likely to invest more in AI-powered solutions to overcome supply chain distortions. Here we will highlight the supply chain’s problems and how AI technology helps mitigate this risk. 


Supply Chain Crisis 

A supply chain crisis is when the flow of goods and services within a supply chain is disrupted, leading to significant negative impacts on the affected parties. Such crises can occur for various reasons, such as natural disasters, geopolitical conflicts, pandemics, and economic disruptions.

The effects of a supply chain crisis can be severe and far-reaching. 

  1. For example, disruptions to a supply chain results in delays in delivery times, shortages of critical goods, and increased costs for businesses and consumers. 
  2. In extreme cases, a supply chain crisis can cause entire industries to come to a halt, leading to significant economic losses.

Organizations need to have a robust supply chain management strategy to mitigate the impact of a supply chain crisis. This strategy should include measures to prevent disruptions, such as diversifying suppliers and having contingency plans in place. 

Additionally, organizations can use blockchain and artificial intelligence to identify and respond to disruptions quickly, monitor supplier performance, and enhance supply chain visibility.

By taking proactive measures to manage their supply chain, organizations can minimize the impact of a supply chain crisis and maintain their operations even in challenging times.

Critical Ways AI Can Avoid Supply Chain Disruptions 

Artificial Intelligence (AI) can be used to help prevent supply chain disruption by identifying potential problems early on and providing actionable insights. Here are some specific use cases:

Predictive Analytics

AI-powered predictive analytics can help companies forecast demand, identify potential supply chain disruptions, and take proactive measures to avoid them. By analyzing past data and predicting future trends, AI can help companies make informed inventory, production, and logistics decisions.

Risk Management

Developing strategies that overcome supply chain problems using advanced technology like AI is possible.  For example, AI-powered risk management systems can monitor political instability, natural disasters, and other external factors that may impact supply chain operations.

Real-time Monitoring

AI-powered sensors and monitoring systems can be used to track products and materials in real-time, providing companies with visibility into the entire supply chain. This allows companies to quickly identify delays, quality problems, or inventory shortages and take corrective action.

Autonomous Vehicles

AI can be used to manage and optimize autonomous vehicles, which can help reduce delivery times, lower costs, and improve efficiency. By using AI to manage fleets of autonomous vehicles, companies can reduce the risk of disruptions caused by driver shortages, traffic delays, or accidents.

Supplier Evaluation

AI-powered supplier evaluation systems can help companies identify the most reliable suppliers and monitor their performance over time. By tracking key metrics such as delivery times, quality, and cost, AI can help companies make informed decisions about which suppliers to work with and how to optimize their relationships.

Enhance Profit Margins 

Companies run the risk of pushing products that don’t sell, which could result in losses of millions of dollars. Companies can use AI-powered forecasting to detect changes in demand earlier, allowing them to optimize their products for the highest profit margins.

McKinsey says that out-of-stock products can be avoided by 65 percent with AI-enhanced supply chain management. On the deals side, Artificial intelligence can help outreach groups recognize upsell and strategically pitch potential open doors for vital records.

Lesser Risk with Staff Members 

A growing problem in the supply chain is the need for more staff. For instance, employee turnover is higher than the average for 58% of the businesses surveyed by PwC. Also, only 23% think they have the digital skills they need to reach their future goals. As a result, more businesses now rely on AI to determine who might leave and why.

In particular, AI enables businesses to better comprehend employees’ thoughts, feelings, and expectations in the workplace by providing them with responsive and real-time feedback. 

Human resource professionals, for instance, use data analysis to determine which employees are dissatisfied and may quit. As a result, they can successfully retain staff members.

AI can help companies avoid supply chain disruptions by providing real-time visibility, predictive analytics, risk management, and supplier evaluation. By using these tools, companies can avoid potential problems and proactively take steps to ensure the smooth operation of their supply chains.

Conclusive Thoughts 

AI in the supply chain enables professionals to assess and optimize their supply chain in real-time, speeding up a process that previously took weeks or months. Individual AI projects won’t work in the supply chain to increase ROI; AI’s data analytics must be considered for execution fine-tuning.

In conclusion, AI offers a range of solutions to help companies avoid supply chain disruptions. Ultimately, using AI can help companies reduce costs, improve efficiency, and maintain customer satisfaction by ensuring the timely delivery of products and services. With the help of AI, companies can better manage their supply chains and remain competitive in an ever-changing global marketplace.

Amy Klein

Amy Klein

Amy Klein is an accomplished writer and editor with years of experience in the anime and manga industries. She brings a unique perspective and deep understanding of the otaku subculture to her insightful and engaging writing, featured in various publications.

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