“Machine intelligence is the last invention that humanity will ever need to make,”

– Nick Bostrom.

Artificial intelligence or otherwise known as AI is a simulation of human intelligence that is created to mimic human cognitive activity as well as thinking like human. AI is an automated intelligence that can rationalize and act accordingly, which results in the best possible chance of achieving specific goals.

Running since 1950s, AI has begun to shape the world more than humans realize it. One of the impacts of AI is in the supply chain industry. Supply chain is a management network which processes the flows of goods and services, e.g., transformation of raw materials into final products. AI helps ease the process of supply chain through its accuracy, efficiency and competitiveness.

          Some of the factors that AI help in the supply chain is its accuracy in inventory management and on-time delivery. Automated AI could handle mass data thus have a low error tendency as it helps prevent overstocking, inadequate stock and unexpected stock-outs. The algorithm integrated on the AI predicts and discover new consumer habits and forecast seasonal demand. The full potential of AI involves anticipating future demand trends as well as minimizing the costs of overstocking unwanted inventory. The AI accuracy removes operational bottlenecks and unforeseen abnormalities.

          Efficiency is one of the standpoints of having AI in the supply chain industry. AI could solve several warehouse issues faster and accurately than humans can thus simplifying complex procedure. The rise of AI has created many driving forces to competitive nature as AI maximizes productivity by reducing uncertainties. Competitive pressure created from AI forces firms to extract every possible ounce of cost due to the limitation of the economies of scale.

Some of the major drawbacks from the use of AI however are the complexity of the system as well as the operational costs needed to bear AI. AI needs constant maintenance and high operational investment. AI will also replace a lot of human labor which could raise a debate of ethnicity.

          AI is to shape the world and it is proven to be highly effective in today’s era. Automated intelligence does not hinder human growth but become a focal point for human growth as they progress further every day. AI allows companies to be fiercely competitive thus reducing their margin of error. Algorithm injected on the AI will provide solutions for firms as it can predict forecasts and demands with the highest accuracy possible. AI in the supply chain is highly effective and perpetual hence it becomes a necessity in humans every day lives.

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Hansson Laksono

Staff writer (intern) at MadeinIndonesia.com

Works Cited

Manager, Tina Jacobs     Product Marketing, et al. “Artificial Intelligence in Supply Chain and Logistics.” ThroughPut, 30 Mar. 2021, throughput.world/blog/topic/ai-in-supply-chain-and-logistics/#:~:text=Artificial%20Intelligence%20(AI)%20in%20Supply%20Chain%20%26%20Logistics,-Artificial%20Intelligence%20and&text=Ai%20in%20supply%20chains%20is,while%20fostering%20safer%20working%20conditions.