How to Integrate AI Into Your Supply Chain

How to Integrate AI Into Your Supply Chain

Artificial intelligence is making inroads across the spectrum of logistics operations, perhaps faster than many in the industry are aware.

AI is being integrated behind the scenes in a wide range of applications designed to make them—and the people who use them—exponentially more efficient.

You’ll find it in various logistics applications such as route optimization, greenhouse gas emission information, and TMS integrations. Companies are quick to acknowledge the potential to enhance freight matching and operational efficiency, along with enhancing route optimization.

The most significant hurdle for AI adoption is trust. In Odyssey LogisticsAI Meets Critical Intelligence research brief, just 25% of respondents use new applications or insights from AI in their organization.

Despite the hype, AI is still in the early stages. Reluctance to fully embrace AI is understandable at this point in its development. It’s not always relevant to certain activities, and there are cultural risks, such as labor issues. The logistics industry has been slow to adopt new technology solutions, and the uncertainty many companies experienced during the freight tech boom did not generate enthusiasm for the next generation of tech solutions.

However, companies are recognizing the potential for collaborative tools, workflow optimization, and operational improvements. Companies must evaluate the activities where AI is well equipped to handle repetitive, transactional tasks and those where human institutional knowledge is required.

The study revealed that 52% of the respondents favored a human-led approach to AI, in which AI tools and insights support decision-making. As technology advances, practical uses for AI are gaining traction to advance this effort.

Security Considerations for AI Integration

In the study, cyber security was a primary concern, with 46% prioritizing it over traditional concerns like fuel prices.

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It’s critical that logistics professionals realize cybercrime is a risk that requires effective preparation and strategy, including employee training. Operations and IT managers must understand and prepare for new attack vectors made possible by AI and create an acceptable use policy for public generative AI solutions.

“In my role, I get to see both the good and the bad of AI,” said Mike Irwin, Chief Information Security Officer and Senior Director of Technology Operations for Odyssey Logistics. “The good being collaborative tools, workflow optimization, and operational improvement. The bad being the way that threat actors are using AI to further compromise organizations.”


3 WAYS TO USE AI

Blending human insights with AI’s data-driven capabilities will foster more thoughtful decision-making for efficiency and safety.

  • Shipping Practices. Tighten efficiency throughout the supply chain through optimized shipping routes and load consolidation.
  • Sustainability. AI is already used to analyze greenhouse gas emissions to guide purchasing decisions and strategies and enhance compliance reporting.
  • Resilience. Predictive and prescriptive analytics capacities will refine forecasting to include diverse source inputs from emerging markets to improve supply chain resilience.

The Human Experience Meets AI

Given global challenges affecting supply chains, human intelligence paired with the power of AI-driven planning will help navigate complex situations.

Human insights into global nuances and logistical complexities augment AI’s data-driven capabilities and can foster more thoughtful decision-making to enhance both efficiency and safety.

This balance could better equip supply chains to navigate the unpredictable effects of regional conflicts and economic instability.