How AI Helps Make Sense of Supply Chain Bottlenecks

Here are a few key areas that supply chain organizations should look to integrate AI first to generate short-term gains.

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To say the global supply chain is in a period of disruption would be a massive understatement. From container shortages to sourcing challenges, virtually every aspect of the supply chain is giving professionals in the space headaches. And, it arguably couldn’t have happened at a worse time with the holiday season beginning to ramp up and only set to compound current slowdowns further.

With that, supply chain organizations and professionals are leaving no stone unturned to help free up their operations, bolster efficiency and drive success. And for many, this means leaning further into their technology infrastructure or adopting new tools all together -- particularly artificial intelligence (AI).

Set to be worth $21.8 billion by 2027 -- with a CAGR of 45.3% until 2027 -- the supply chain AI market is one of the fastest growing sectors in the technology world today. And, with supply chain organizations hitting warp speed on their digital transformation efforts in response to current market conditions, the market is unlikely to slow down anytime soon.

Yet, for all of the promise that AI presents to companies, it is imperative to focus on the correct areas in order to hit the ground running. Here are a few key areas that supply chain organizations should look to integrate AI first to generate short-term gains.

Capacity management and forecasting

The shortage of available capacity currently has been widely reported. However, this is being aggravated by how erratic the capacity market is currently as well. For example, while shortages may be widespread, there are also unexpected periods where capacity has opened and shippers have been unable to react quickly enough to keep things moving.

The supply chain world is as interconnected and complex as it has ever been. And, therefore, without the proper technology in place for professionals to keep track of the market in real-time, capitalizing on opportunities that crop up is virtually impossible. AI addresses this problem head-on by automating market analysis and enabling real-time data synthesis. Moreover, AI can develop constantly evolving forecasts to allow shippers to have a better sense of both what the current capacity environment looks like and what it is going to like at a given moment in time.

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Intermodal optimization

Ports and sea-based freight have become the posterboy for the current supply chain snarl. And, with the bottlenecks plaguing this area, it has become a necessity for shippers to become more flexible in their shipping arrangements. For example, it may be more expensive to ship loads via air vs. sea, however, if it means a shorter lead time to customers, the upfront cost may be worth it. Unfortunately, doing this kind of cost-benefit analysis on the fly isn’t possible without sophisticated technology. Therefore, having AI technology that is integrated into the intermodal decision-making workflow is pivotal for shippers and supply chain professionals to effectively circumvent blockages and to do so without breaking the bank.

Jump-starting micro-fulfillment

There has never been a better time for shippers to diversify their shipping operations. Of course, warehouses still have a part to play. However, with consumers now fully accustomed to speedy shipment and order access and the current tie-ups that exist in the supply chain space, relying on out-of-the-way warehouses for fulfillment just isn’t conducive to the supply chain environment. That’s why shippers need to find ways to tap into their locally available stock as a way to meet shipping expectations of customers and reduce the stress on warehouses.

Thanks to innovations in AI, shippers can literally turn their physical store locations into micro-fulfillment centers, thus drastically cutting down on shipping lead time. Furthermore, enabling “micro-fulfillment” allows for shippers to build more resilient supply chains that are more equipped to deal with future disruptions as well.

The current supply chain environment is certainly a challenging prospect for supply chain stakeholders worldwide. However, by adopting AI and implementing it strategically, supply chain organizations can alleviate many of the strains they are feeling today and also position themselves for future success as well.