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How Do Logistics And Supply Chain Industry Use Artificial Intelligence

Photo by Dimitry Anikin on Unsplash

Years back, scientists and experts used to imagine incredible sci-fi technologies in movies that have become the reality of today. And these automation technologies have impacted the logistics and supply chain industry positively.

With each passing day, AI is becoming more and more diverse and robust in its offerings as it streamlines workflows and operations from several devices and cloud apps. AI is implementing advanced maths to build products and systems that can adapt and learn.

When it comes to the supply chain sector, AI has transferred many areas such as inventory management, operations, customer support, and much more. With the help of AI, computers can manage huge data sets at a time, which wouldn’t be possible by humans.

A machine can evaluate unlimited possibilities that lead to successful strategizing by applying intelligent algorithms and innumerable datasets. AI reduces human errors and also maximizes operational efficiency with less cost.

Topics to Cover

  • AI in Logistics
  • AI in Supply Chain
  • Applications of AI in the Logistics Industry
  • Use Cases of AI in Logistics
  • The Future of AI in Logistics and Supply Chain

AI in Logistics

AI is a blessing for several industries including logistics as it offers intelligent machines to predictive analytics. According to sources, AI is widely used in 4 business areas namely, product and service, sales and marketing, operations, and supply chain. These all collectively leverage 87% of AI in the logistics sector.

As per sources, the logistics businesses will hit USD 1.3 to 2 trillion annually by leveraging AI into their systems.

AI in Supply Chain

AI and machine learning are transforming the face of the supply chain sector. AI in the supply chain helps deliver the robust optimization capabilities needed for precise capacity planning, enhanced efficiency, better output, reduced costs, and top-notch quality.

During the time of Covid-19, building a better understanding of the effects on supply chains can help manufacturing businesses cope with uncertainties rightly.

Applications of AI in the Logistics Industry

Demand Prediction

Artificial intelligence facilitates businesses to use real-time data in their predictions. Thus, AI-based demand prediction methods mitigate errors more widely than conventional prediction methods like exponential smoothing methods, etc. With more accuracy in demand forecasting,

  • Customers might experience fewer stockouts
  • Local retailers can prevent the holding costs
  • Manufacturers can optimize the number of vehicles dispatched to storehouses and decrease operational costs as they enhance their labor planning.

Warehouse Automation

Warehouse automation is another AI tech to improve businesses’ logistics.

The warehouse automation market is worth USD 2.28 billion in 2016 and will grow at 11.8% between 2017–2022.

For instance, in 2012 Amazon obtained Kiva Systems, and in 2015 modified its name to Amazon Robotics. To date, Amazon has 200k robots working in their storehouses. These robots are helping humans for selecting, sorting, delivering, and packaging.


Logistics needs a lot of planning that requires systemizing customers, suppliers, and different units in the organization. ML solutions can enable planning as they can manage situational analysis and numerical analytics.

Damage Identification

Damaged items can lead to unhappy customers. Computer vision tech facilitates businesses to detect damages. Organizations can take into account the damage type, depth, and take steps to prevent further damage.


Autonomous Things (AuT) are devices that do not need human interaction due to AI. AuT includes drones, robotics, and self-driving cars.

Self-driven Cars

Self-driven vehicles can transform logistics by reducing massive reliance on human drivers. Techs such as platooning help drivers while decreasing carbon footprints and fuel usage. Mercedes Benz, Tesla, and Google are vastly investing in autonomous vehicles and in no time, these vehicles will be seen all over the world.

Warehouse Maintenance

Machines can now manage security with improved AI. An unsupervised storehouse can be guarded by tracking all those entering and leaving it with AI. Moreover, machines can track products in storage and the ones leaving the storehouse by scanning the barcode on the package and thus updating the inventory.

Manpower Management

With the help of top-notch AI solutions in place, dependence on admin becomes minimum. AI is being used in hiring employees, training, supervising them, rating their performance, knowing their strengths & weaknesses to make sure each staff member is assigned the task they are well-versed in.

AI can help a business with its recruiting and training processes more impactfully. This enables seamless transactions in the organization.

Use Cases of AI in Logistics

  • UPS

UPS is a top parcel delivery company using AI-enabled GPS known as ORION to discover the quickest and most affordable route. ORION uses an algorithm to identify the better route for every delivery with data provided by cars, drivers, and customers.

  • Lineage

This company uses artificial intelligence to manage its storehouses. The algorithm forecasts which products will remain in the storehouse longer and which ones will leave shortly.

Based on this information, the products that will remain for a longer time are kept at the back and the ones to leave faster are stored in the front. This has increased its productivity by more than 20%.

The Future of AI in Logistics and Supply Chain

Usage of AI in logistics is thriving these days, as not many businesses are using it as of now. However, the rise in the number of businesses using AI has risen 3 times in the past 5–6 years.

Businesses that are not implementing AI and ML for their logistics management in this highly competitive environment are keeping themselves away from growth as they have not updated themselves to customer demands. Hence, choosing the most suited AI solution for your organization is a step ahead towards your growth.




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Henny Jones

Henny Jones

Henny is Award Winning Sales and Marketing Manager Helping Businesses to gain more Audience. https://www.hdatasystems.com

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