The new age supply chain: AI, automation and always-on optimisation

Hindustan Times

a day ago

Supply chains today are under immense pressure. With rising consumer expectations, global disruptions, and the push for faster delivery, companies can't afford delays or inefficiencies. The old ways of manual processes, siloed systems, and reactive planning no longer hold up. What's emerging instead is a more connected, intelligent, and continuous system powered by artificial intelligence (AI), automation, and real-time optimisation. AI (Pixabay)
In recent years, the pace of investment in these technologies has been significant. The market for AI in supply chains grew from $5.05 billion in 2023 to $7.13 billion in 2024, and it's projected to reach $51 billion by 2030. Nearly half of all supply chain organisations are now investing in AI and advanced analytics. For logistics alone, the AI sector is worth over $20 billion, and the returns are already becoming visible in how businesses operate.
Take demand forecasting. Not long ago, it relied mostly on past sales data and broad seasonal trends. Now, AI models are reading signals from weather changes, social patterns, and event calendars to predict what customers will want and when. Forecast errors have dropped by up to 35%, and procurement costs are down nearly 30%. Retailers like Walmart and Target are using these models to keep shelves stocked with just the right amount, avoiding both overstocking and stockouts.
Warehousing has also changed significantly. AI-powered robots are picking, sorting, and scanning inventory with high speed and precision. Amazon's DeepFleet system has improved internal fleet efficiency by 10%, showing how machines and people can work together. Robotics has helped increase warehouse productivity by about 30% while maintaining near-perfect picking accuracy. That level of performance allows businesses to offer same-day or next-day delivery with confidence.
The journey from warehouse to doorstep is also seeing major transformation. The last mile of delivery is notoriously complex and often accounts for more than half of total logistics costs. AI now maps smarter routes, predicts traffic, and adjusts plans in real time. Amazon is using generative AI tools to help drivers navigate more efficiently, with hands-free support and improved planning. It's not just about saving time. It's about operating more efficiently at scale.
Some companies are implementing agentic AI systems that go beyond supporting decisions. These agents actively make decisions across procurement, logistics, and warehouse task planning. They learn continuously from results and adjust strategies over time. In some warehouses, this has led to 95% task optimisation and 60% faster processing compared to traditional systems.
These changes are already visible in large operations. Maersk is using AI to predict vessel equipment failures before they occur, reducing downtime by 30%, saving $300 million annually, and cutting emissions by 1.5 million tons. Unilever is using AI to plan its supply chain more flexibly across global markets. Retailers like Target are also relying on internal systems to reduce waste and improve inventory accuracy.
Adopting AI is not always straightforward. Many companies still rely on legacy systems that trap valuable data. Around 77% of potentially useful supply chain data remains siloed. Up to 70% of AI implementation budgets are spent just on cleaning and preparing data. There is also a shortage of skilled talent. About 68% of organisations say they struggle to find professionals who understand both supply chains and AI. Training and internal capability building are essential.
Despite these challenges, supply chains are becoming more continuous and self-adjusting. This does not mean constant human monitoring. Instead, systems now track, predict, and act in real time. Tools like digital twins let companies simulate scenarios such as shipment delays or demand spikes in specific regions. Connected sensors allow for instant action, including rerouting deliveries, updating orders, and triggering maintenance before issues escalate.
AI-led supply chains are expected to expand further, with growing emphasis on sustainability, energy efficiency, and transparency. Companies are adopting blockchain for traceability, edge AI for on-the-ground decisions, and intelligent systems that operate around the clock. Supply chains are no longer just support functions. They are strategic levers. They have been driving global trade since the Silk Route. What's changing now is how intelligently and autonomously they operate. As the world grows more connected, their role will only continue to expand, powering everything from factory floors to front doors.
This article is authored by Somdutta Singh, founder and CEO, Assiduus Global.