How is AI In Logistics and Supply Chain Changing the Landscape?

AI in logistics and supply chain has been enforced as a transformative technology with a direct impact on efficiency, accuracy, and cost-effectiveness across various processes ranging from procurement to customer delivery.

As globalization breaks all the barriers and provides a golden opportunity for logistics and supply chain organizations to flourish their business across borders, therefore it’s high time to upgrade the existing business model with AI’s potential. The straightforward benefit of implementing Artificial Intelligence capabilities into your business will unlock new workflows and enable you to handle vast amounts of data with perfection. 

With the reports saying that global AI in the supply chain will make a market size of $157.6 billion in 2033, from $4.5 billion in 2023, it is fair enough to say that modern logistic businesses have already recognized the benefits of upgrading the workplace with advanced digital practices. 

As various emerging technologies are paving their way into the logistics and supply chain industry, therefore, various organizations are consistently trying to simplify and speed up their process using multiple practices. However, using Artificial Intelligence in logistics and supply chain management can be a transformative experience for businesses. 

Did you know AI-powered logistics and supply chain processes can help improve services by 65%? Let Alcax enable you to hire a mobile app development company that helps you digitize your logistics and supply chain process embracing the top technologies and best AI capabilities and adding a competitive edge to your business. Let’s connect now!

Why There Is an Urgent Need for Adopting AI Into Logistics and Supply Chain?

Just a few years back, people got familiar with AI technology. Have you ever imagined that AI will simplify all the complexities of the logistics and supply chain industry? But the day has supper soon become a new reality and its working model is helping for multiple variables. This is where AI in logistics and supply chain management is creating harsh waves and continues with the boon. 

Moreover, it is estimated that by integrating AI into the process, logistics companies will be able to generate $1.3 to $2 trillion in economic value for the next 20 years.

And early adopters can enjoy a 5+% profit margin right now with immediate effect!

If you are still considering it casually then keep yourself informed with DHL, FedEx, and IBM’s statements:

• 65% of companies are expected to implement AI in at least one part of their operations.
• 50% increase in the adoption of AI for route optimization and fleet management among logistics providers from 2022 to 2024.
• 55% of logistics companies are planning to integrate AI solutions for demand forecasting and inventory management by the end of 2024. 
• 70% of AI platforms used in logistics will feature advanced data visualization and analytics capabilities by 2024. 
• 50% of logistics companies are getting ready to automate 50% of their warehouse work by using robots in 2024. 

Whether you are into ecommerce companies, retailing, or a logistics service provider, these stats and facts about using AI in logistics and supply chain management portray the urgency of adopting artificial intelligence into operations.

But before you hire an AI developer, how exactly is it gonna affect the businesses and make them generate good profits? 

The AI-Driven Logistics Solutions can Boost Efficiency by 50%!

Don’t let outdated logistics and supply chain systems hold you back. Let Alcax be your tech partner, enabling you to adopt AI-driven technology for smarter decision-making and reduced delays.

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AI In Logistics and Supply Chain: How It is Impacting the Industry?

Artificial Intelligence is all set to take the logistics and supply chain industry by storm. From manual processes of inventory tracking to automating operations to predictive data accuracy, there’s a long system and mathematics involved. As the success of logistics businesses is measured with “Speed”, therefore it’s important to look for strategies that can help simplify the logistics process. 

But, today with 85.6% of people using ecommerce mobile apps and making an online purchase once a month, there is a steep rise in logistic complexities witnessed by organizations. With each passing day, as customer expectations are rising, it becomes seriously hard for logistics service providers to deliver satisfying experiences to the users.

This is where let’s understand how the implementation of AI in logistics and supply chain is making a profound impact on the industry:

1. Enhanced Route Optimization

Did you know traffic congestion costs the trusting and logistics industry $74.5 billion annually in wasted time and fuel?

That’s not all, 53% of business sales can be dropped with delayed shipments due to poor root planning. 

This is where AI-driven route optimization turns out to be a game changer for logistic companies. The mobile app solutions developed for logistics are integrated with AI algorithms that help in analyzing real-time traffic, weather conditions, and even fuel consumption patterns, and allow the system to dynamically adjust routes to ensure the fastest and most efficient delivery.

The biggest impact of using AI for route optimization is directly reduced transit time, seamlessly aligning deliveries for the defined routes, lowering fuel consumption, and ensuring ultimate customer satisfaction.

AI can further optimize the delivery routes in a way that humans could never imagined and save time and unnecessary operational expenses.

2. Increasing Efficiency In Supply Chain With Predictive Analytics

One of the most impactful contributions of AI in supply chain and logistics is its ability to predict future disruptions and trends and keep you ahead in the competitive market.

So how do predictive data analytics work in the supply chain?

By analyzing the vast amounts of historical and real-time data, AI can forecast demand fluctuations in the supply chain, detect potential disruptions like supplier failures, and predict inventory needs. 

The predictive data analytical model integrated into our next-gen supply chain applications, helps businesses extract valuable insights from the gathered data. This level of predictive analytics improves inventory management, reduces overstocking, and manages restocking to overall improve the workflow of the supply chain.

Using AI in logistics can empower companies to plan better and mitigate risk, but this requires you to hire a software developer with the right expertise to experience transformative change in logistics and supply chain.  

3. Automation Warehouse to Save Up to 50% in Cost

Did you know 35% of businesses are struggling hard to maintain inventory accuracy and 45% of warehouses are finding difficulties in managing order volume fluctuation, which overall leads to an increase of 50% cost in warehouse management!

AI-powered automation is a perfect revolution in warehousing that has not only simplified and automated the various aspects of warehousing but also enabled businesses to save up to 50% on cost and overall accuracy.

Right from picking, packing, and storing to shipping, the AI-driven robots can handle the entire warehousing task with accuracy and speed. As these robots are once trained by professionals and their inbuilt AI system continues to learn and adapt to new improvements, therefore, hiring a mobile app developer to transform your business system now. This leads to faster and error-free order fulfillment. 

4. Enhancing Real-Time Tracking and Data Visibility

Get a bigger picture of your logistics and supply chain business by simply implementing AI algorithms into your existing application. AI can enhance supply chain visibility by offering real-time insights into the movements of goods and materials across the supply chain. 

This only helps logistics management to keep an eye on what is coming in and going out in real-time, but also allows them to predict potential delays, providing flexibility to reroute the shipments if required and provide customers with accurate delivery estimates. 

The transparency AI brings to supply chains allows companies to react more quickly to disruptions and ultimately reduces costly delays. 

5. Reduction in Operational Cost

By using AI to predict purchase trends, the company can easily avoid overstocking and understocking conditions, which significantly reduce a major cost in logistics and supply chain.

According to the reports, around 4% of all companies saw cost savings of at least 20% and 28% lowered their cost by 10% or less after adopting AI. 

The automated AI models can help logistics companies to efficiently optimize their processes which results in cost savings. From cutting down manual labor in warehouses to optimizing fuel usage on delivery routes, AI solutions help logistics companies lower operational costs in many ways. 

Improve supply chain management with AI-Powered Solution!

At Alcax, we have created strategic digital solutions for ecommerce businesses, warehousing, and 3PL service providers that help in optimizing operations and cost reduction.

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How Large Companies and Startups Are Adopting AI in Logistics?

AI has become an integral part of logistics and supply chain operations for optimizing components. If you are looking to seamlessly integrate AI functionalities into your logistics and supply chain business model, then hire a software development outsourcing company. Many companies have already realized this and are harnessing the power of AI to achieve significant efficiencies and cost savings. 

According to the reports, 36% of businesses of different sizes have successfully implemented AI for supply chain and logistics processes. Let’s check out how these companies have implemented and what exactly you can consider streamlining using AI capabilities…

1. Amazon

Whether you talk about logistics, supply chain, ecommerce platform, or warehouse inventory management- AMAZON is the dominant global leader using AI to enhance multiple aspects of its logistics operations. Amazon is the first to employ 200,000 robots in its warehouse to automate warehousing systems. These AI-driven robots are majorly used for picking, packing, and sorting items ultimately increasing efficiency and reducing errors.

Next, Amazon is testing drones to ensure the fastest deliveries and self-driving trucks which rely on AI for optimization and safety. 

If you are still wondering how Amazon works, you need to create an eCommerce app integrated with all the top features of Amazon. Then further needs to be upgraded with AI capabilities. 

2. DHL 

Another industry leader that has been relying on ML and AL capabilities to streamline warehouse options is DHL. They adopted a “Vision Picking” system that equips workers with smart glasses that guide them to the right products, increasing accuracy and efficiency. 

These systems use Augmented Reality and AI to provide step-by-step instructions to warehouse employees. Further, they use AI to analyze vast amounts of supply chain data which helps companies optimize inventory levels, reduce stockouts, and improve the overall efficiency of their logistics operations.

3. FedEx 

AI-powered product sorting robots have created a buzz in the supply chain market, and FedEx is an early adopter of these robots. These robots help not only automate the parcel sorting operations in its hubs but also significantly reduce the sorting time by sorting up to 1200 parcels per hour.

In addition, FebEx uses AI for predictive analytics to forecast potential delivery delays due to weather disruptions or traffic congestions. Overall, implementing this advanced technology can help in enhancing customer experience. 

Read More: Top AI App Ideas: Make Your Business Future-Ready

Conclusion

By the end of this blog, it is fair enough to say that the impact of AI in logistics and supply chains will continue to evolve in the future. However, with the increasing complexities in logistics and supply chain, the ability to handle complex systems and perform excellently has become a real challenge for logistics companies. This is where implementing AI in logistics and supply chain will lead to providing new capabilities and efficiencies. To harness the best possible features of AI in logistics and supply chain, it is worth hiring an AI app development company that can help you build an AI-powered solution that aligns with your business requirements.

If you are all set with your requirements and ready to take your logistics operation to the next level, then drop us your details or contact us for project validation and cost estimation.

FAQs

Here we gathered top FAQs that help you better understand logistics and supply chain management services powered with AI capabilities.