AI: The next step in the evolution of logistics & supply chain management

Posted On October 17, 2023

Some would say the invention that’s had the greatest impact on logistics and supply chain management is the shipping container. Others might point to UPC bar codes.

The advent and ultimate applications of artificial intelligence may add a new contender for the title.

Our guest in a recent episode of “What’s Working with Cam Marston” was Shashank Rao, the Jim W. Thompson Professor in the Department of Supply Chain Management at Auburn University’s Harbert College of Business. He says AI presents the next step in streamlining the supply chain.

Artificial intelligence is that next iteration that is looking to make sense of all this data that we are collecting, not just from auto-ID systems but all sorts of various applications,” Rao said.

When most people think of AI, they think of things like ChatGPT that are what Rao calls generative AI. Generative AI creates something that didn’t exist before. “The opposite of that is traditional or weak AI, where you’re not necessarily generating anything new, but you’re just using the AI to analyze data and make prescriptions,” he said. “That’s really the AI that we’re seeing applications of in manufacturing.”

Some of those applications might include automatic image processing, which allows for much more accurate estimates of on-shelf inventory, or quality control and defect detection, currently a very labor-intensive process.

“It’s not just about cost reduction, though cost reduction is a part of it,” Rao said. “Really, it’s about enhancing the end product and the end outcome.”

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