What We Must Know About Artificial Intelligence Supply Chain Management

Artificial Intelligence

Every industry nowadays always have to take supply chain management or SCM into consideration but has been overlooked by AI startups and vendor services companies. Unlike finance, healthcare, and retail, supply chain management is always taken into priority because it’s the flow of goods and services that will maximize customer value.

Due to the innovation of technology and the development of artificial intelligence, businesses are turning their heads to the benefits of artificial intelligence to their services. Even the largest firms around the world are utilizing artificial intelligence because of the opportunities it brings to their supply chains.

However, there are things we must know about artificial intelligence before we apply it to the management of supply chains. Knowing how artificial intelligence works cannot only improve efficiency but benefit even more to the company if you know the components of artificial intelligence. Thus, here are the elements we must know about artificial intelligence in supply chain management.

What is AI?

AI or artificial intelligence is a loosely defined term that refers to a category comprised of a collection of technologies capable of mimicking cognitive functions. Cognitive functions are traditionally attributed to the human mind, but artificial intelligence mimics this by having expert systems, intelligent systems, neural networks, and natural language processing.

However, business enterprises refer to artificial intelligence today as technologies having deep learning, machine learning, and speech and vision recognition systems.

The Use of Machine Learning in Supply Chain Management

Machine learning is a branch of artificial intelligence where systems are capable of identifying patterns, learning from data, and carry out decisions. Due to the innovation of technology,  systems that have machine learning are capable of utilizing its unique features without the need for complete human assistance.

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Computers and other technologies can identify patterns, learning data, and make decisions without having to be explicitly programmed. Further, businesses can apply this is supply chain management by feeding their computers with good quality data from customers and training their computers to improve their processes for each and every task.

Further, businesses can choose the algorithms to implement for their computers depending on the data they have. For instance, businesses can unlock a new source of revenue savings from different algorithms such as a self-healing supply chain. Machine learning will do its job by monitoring, observing, and correcting lead times.

Another advantage of what machine learning technology can bring to businesses is to increase customer service experience and levels. Machine learning can increase customer service experience and levels through optimizing inventory levels and inventory replenishment plans. Consequently, it will provide a more accurate demand behavior for every new product.

The Use of Deep Learning in Supply Chain Management

Deep learning is a branch of artificial intelligence that is also a part of machine learning, where it contains neural networks. The neural networks of deep learning allow machines or computers to learn by example. Learning by example is something human beings naturally do to improve the way they function and perceive things.

Further, whether supervised, semi-supervised or unsupervised, deep learning influences the neural networks to interpret large amounts of unlabeled or unstructured data. The neural networks can then gain insights and will learn from those insights to apply the insights to new data sets and improve it.

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The advantage of deep learning in supply chain management is having an automated planning and scheduling agent that can save time and money for the company. The automated planning and scheduling agent is available for 24 hours a day and 7 days a week to automatically handle incoming low impact exceptions.

The automated planning and scheduling agent can then deliver detailed reports from observations and the actions taken to correct the issues. Deep learning is also capable of notifying human experts for larger issues that the machines cannot handle.


Businesses and other organizations that provide consumers with goods and services should keep in mind the importance of artificial intelligence. Knowing the benefits and how artificial intelligence works can maximize customer value as well as keep the company at its cutting edge to have a competitive advantage in the market.