Over the years, artificial intelligence (AI) has paved way for various technological advancements. Be it automotive, biosciences or finance, artificial intelligence is truly transforming the way people work, live and do things. PwC estimates that AI could add as much as $15.7 trillion to the global economy by 2030.
One of the industries that AI has been specifically targeting is supply chain management. The AI is changing the industry at a slow and steady pace. However, due to the tediousness and uncertainty of the process, supply chain managers tend to get confused about adapting the technologies.
Let’s have a look at the pros and cons of an AI driven supply chain.
PROS
- Automation: An AI powered warehouse relies on robots to store, locate and pickup items. They can enable faster packaging processes and increase the productivity and efficiency. This also leads to the smooth operations of businesses.
- Reduction in lead time: AI can help reduce the lead times by ensuring faster delivery and accurate performance. The development in the systems can take into account various parameters in logistics like traffic, probable delays, alternative routes, as well as weather forecasts.
- Improved safety: Robots and automated machines help reduce the chances of man-made injuries which may arise due to fatigue or heavy loading, thereby reducing the chances of breakage of items and loss of productive hours at the same time.
- Improved customer service: Nowadays, businesses are using AI to boost efficiency of their customer service using the help of chatbot technologies. This helps reduce service cost by speeding up the response time and answering majority of the clients’ regular questions.
CONS
- Gap in skill set: It is not viable to deploy AI to the fullest extent, as AI cannot replace certain traditional processes. Furthermore, the entire process is a bit cumbersome and requires expert consensus.
- Control and monitoring: While AI can be trusted to take control and manage the processes that occur in the supply chain, it still needs manual input at some point or the other.
- Black box scenario: Sometimes, when algorithms start to make new algorithms, they are executed automatically. This situation is called black box scenario. In this, the inputs and operations are not visible to the user, which may lead to complicated situations and tangled mistakes.
- Security: As with any other data which administers a lot of business information, which is prone to getting hacked. Therefore, data security concerns always arise when dealing with artificial intelligence.
While artificial intelligence as an industry is evolving with numerous research and development underway, one cannot overlook the positive side the concept has to offer in the field of supply chain. With digitization on the rise, several processes such as logistics, distribution, warehousing and transportation can be automated with smoother operations and better efficiency.
