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Pros and Cons to using AI to Manage Supply Chains

Pros and Cons to using AI to Manage Supply Chains

Artificial Intelligence (AI) is everywhere around us. The new type of intelligence is changing the way people live, and companies work.

AI is changing it slowly but steadily as the supply chain systems are growing. This process can take a while, making supply chain managers uncertain and confused about whether or not to adopt AI technologies.

Let’s have a look.

These are the pros and cons to using AI to manage supply chains

No technology, no matter how advanced, is perfect. This is why we’re discussing the pros and cons associated with AI. Let’s not waste time. These are some of the benefits of AI-based supply chains.

1. Automation

Automation has an added advantage when it comes to managing supply chain systems. An AI-powered warehouse, for example, relies heavily on robots to locate, store, and pick goods. It is possible to do this routinely with pre-programmed machines, which speeds up packaging and increases productivity. The business runs smoothly because there are fewer people involved.

2. Inventory management

Artificial Intelligence systems has the ability to accumulate, filter, and analyze gigantic datasets. AI is getting good at inventory management as it gets updated. It can detect consumer preferences and compare demand and supply to ensure stock levels are kept to a minimum and not disrupt the supply chain.

This strategy is not new, as many companies already use it to manage their operations. When taking an example the best paper writing service often relies on AI to predict future trends and identify seasonal demands. This helps them stay on the right track and deliver papers promptly.

3. Timely delivery

It is important to mention AI as an improvement in logistics. The new systems can take into consideration multiple factors simultaneously, such as traffic delays, weather forecasts, alternative routes and traffic. They can create highly precise timing estimates, which will allow you to deliver your goods on time.

4. Safety improvements

Safety at work is improving as supply chain processes become more efficient and organized. AI enabled systems can eliminate the risk of manmade incidents. Warehouses also implement these security systems for better safety.

5. Lower operational costs

Another benefit of using AI in the supply chain is cost reduction. Automation means that most of the work can be done automatically, so you will need to hire fewer people. Machines can work 24 hours a day without any breaks, and the number of workplace incidents and mistakes also decreases. AI is a long-term investment in the supply chain that makes it more profitable.

6. Better customer service

AI should be used to improve customer service in supply chain businesses. What is the answer? Chatbot technology is the answer. Chatbots help companies to save time and improve customer satisfaction by answering 80% of clients’ routine questions. Artificial agents are available 24/7 and get smarter every conversation. They are expected to replace human agents soon.

Now that you’ve seen the benefits of AI in managing supply chains, it’s time to talk about the drawbacks.

1. Skill gap

It is not easy to replace outdated technologies and to focus on AI fully. This takes time and requires adequate knowledge. To make AI work seamlessly, you must understand every aspect of software development and data science.

2. Control of AI is essential

While AI can do many amazing things, it is not an autonomous system. To ensure seamless functioning, AI requires that you control it and provide inputs.

3. It is difficult to spot a mistake.

AI can do more than just process information. It also allows for learning and becoming even smarter. Over time, it becomes a complicated monitoring system. However, this is precisely why it is difficult to spot and identify errors when they occur.

4. Security concerns

AI is a digital system that manages sensitive business information. If you do not invest in top-quality security systems that have state-of the art safety features, this can pose a serious problem. Only one security incident could jeopardize supply chain performance, so you better make sure to keep it protected 365 days a year.

Many logistics and shipping companies already use AI in their supply chain systems.