Updated: February 24, 2024
4 min read

How Generative AI Will Enhance The Supply Chain

Savvy business leaders are already beginning to identify use cases for generative AI in their organizations. From customer service to marketing and HR, generative AI’s ability to analyze data and generate content in a variety of formats can add significant value to internal business processes. But what about the supply chain?

AI, in general, has been making waves in supply chain functions for a while now – particularly when it comes to demand planning and optimizing delivery. So, how can generative AI build on that evolution and add extra functionality? Read on to find out how the technology can further improve the supply chain.

What Is Generative AI Capable Of?

Before we look at some specific supply chain use cases, let’s quickly recap what the technology popularized by ChatGPT can actually do:

Generative AI can automatically create content across a variety of formats, including text, images, and video.
Generative AI can interpret requests in a variety of formats, too – most commonly as conversational text requests.
Generative AI can analyze vast quantities of data (potentially in real-time), including text data, numerical data, and image data.
Generative AI can also summarize data and produce easy-to-action reports and recommendations based on the data.

With these capabilities in mind, it’s easy to imagine how generative AI could aid supply chains. But let’s explore what that looks like in practice.

Forecasting Demand And Managing Risk

Generative AI’s ability to analyze vast amounts of historical and real-time data – and provide conversational answers – can make planning much easier. Instead of navigating a complex analytical tool, you can simply ask conversational questions that help you forecast demand.

Questions such as, “What are the biggest market trends that may impact our demand forecasting?” or “How can we plan for alternative suppliers in case of a major global disruption?” or “What are our biggest risks around meeting customer demand?”

In other words, generative AI strips away some of the complexity around using technology for demand forecasting. And these tools can also recommend actions based on what the data suggests.

Sourcing And Managing Suppliers

Generative AI can add value to the supplier selection process by analyzing factors such as supplier capabilities, pricing, potential risk, and other factors. It can also identify insights from supplier interactions and suggest new ways to improve relationships.

Automating Negotiations With Vendors

One surprising use of generative AI is using it to negotiate with vendors – a chatbot that negotiates cost and other contract terms with vendors. This automation has shown to reduce costs, negotiation time, and even improve vendor satisfaction.

Optimizing Logistics

Organizations have been using AI tools to optimize logistics, but generative AI brings a new level of functionality by enabling a conversational interface. This allows users to simply ask the tool for recommendations, providing more opportunities to customize logistics on the fly.

Enhancing The Production Process

Generative AI can improve the production of goods by accelerating the design process with AI-enhanced tools and using predictive maintenance to reduce machine downtime. These advancements can streamline operations and enhance overall efficiency.

Conclusion

While introducing new technology may seem daunting for already stretched supply chains, generative AI offers a game-changing solution. Embracing transformation in a strategic way can help organizations adapt to rapid changes and succeed in an evolving landscape. Those who can leverage generative AI effectively are poised to lead the way in supply chain innovation.

Supply chains have always been in a state of evolution, and generative AI is the latest technology offering transformative improvements. Embracing this innovation can lead to enhanced efficiency, improved decision-making, and a competitive edge in the market.

Andrii Bidochko

CEO/CTO at UBOS

Welcome! I'm the CEO/CTO of UBOS.tech, a low-code/no-code application development platform designed to simplify the process of creating custom Generative AI solutions. With an extensive technical background in AI and software development, I've steered our team towards a single goal - to empower businesses to become autonomous, AI-first organizations.