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How can AI be used to improve logistics?

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Logistics is the process of planning, implementing, and controlling the efficient and effective movement and storage of goods and services from the point of origin to the point of consumption. It is a vital function for many businesses and industries, especially in the era of globalization and e-commerce. However, logistics also faces many challenges, such as increasing customer expectations, rising costs, environmental issues, and complex supply chains. How can artificial intelligence (AI) be used to improve logistics and overcome these challenges? In this article, we will explore some of the ways that AI can enhance various aspects of logistics, such as demand forecasting, inventory management, route optimization, delivery tracking, and customer service.

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Tanya W.

Procurement & Supply Chain Geek | Senior SAP Innovator | Transformation Evangelist |
Muhammed Fayiz

Stores and Procurement
Luis R.

1 Demand forecasting

One of the key aspects of logistics is to anticipate the demand for goods and services and adjust the supply accordingly. This can be difficult due to various factors, such as seasonality, trends, promotions, and external events. AI can help improve demand forecasting by using machine learning (ML) algorithms to analyze large and diverse data sets, such as historical sales, customer behavior, weather, social media, and market conditions. AI can also learn from the feedback and outcomes of previous forecasts and improve its accuracy and reliability over time.

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Muhammed Fayiz

Stores and Procurement
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One thing I have found in my observation is the market demand is now a day's more related to the social media by the influence of cultural political activities & movies (Before some movies are also used for some promotions of brands). Developing a AI based methodology, it can predict the upcoming trends or needs in the market and also the outdated items.

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Luis R.
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La inteligencia artificial (IA) puede revolucionar la logística, especialmente en la previsión de la demanda, a través de su capacidad para procesar y analizar grandes volúmenes de datos con una precisión y velocidad inigualables. Utilizando algoritmos avanzados de aprendizaje automático, la IA puede examinar datos históricos de ventas, tendencias de consumo, variables meteorológicas, se?ales de redes sociales y condiciones del mercado para predecir la demanda futura con mayor precisión. Un aspecto innovador de la IA en la logística es su habilidad para aprender continuamente y adaptarse. Puede ajustar sus modelos predictivos basándose en la retroalimentación de las predicciones anteriores, mejorando su exactitud a lo largo del tiempo.

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2 Inventory management

Another important aspect of logistics is to manage the inventory of goods and services and ensure that they are available at the right place and time. This can be challenging due to the uncertainty of demand, the variability of supply, and the trade-off between holding costs and stock-out costs. AI can help improve inventory management by using ML algorithms to optimize the inventory levels and replenishment policies based on the demand forecasts, the lead times, the costs, and the service levels. AI can also use natural language processing (NLP) and computer vision to automate the inventory counting and verification processes and reduce human errors and inefficiencies.

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Muhammed Fayiz

Stores and Procurement
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In addition to this I hope that AI &ML can also improve the Material handling at the time of receiving,stacking, counting & shipping etc and avoid discrepancies in the stock. Developing an AI & ML based system using datas include demanding, purchasing , locations and stocks, We can control and track goods IN and OUT of the warehouse.

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3 Route optimization

A crucial aspect of logistics is to optimize the routes and schedules of the vehicles and drivers that transport the goods and services from the suppliers to the customers. This can be complex due to the constraints of time windows, capacity, traffic, fuel consumption, and regulations. AI can help improve route optimization by using ML algorithms to find the best solutions that minimize the distance, time, and cost of transportation while satisfying the constraints and preferences. AI can also use real-time data and feedback to adjust the routes and schedules dynamically based on the changing conditions and events.

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4 Delivery tracking

A vital aspect of logistics is to track the delivery status and location of the goods and services and communicate them to the customers and stakeholders. This can be problematic due to the lack of visibility, transparency, and accountability in the delivery process. AI can help improve delivery tracking by using ML algorithms to predict the estimated time of arrival (ETA) and the risk of delay or damage based on the historical and real-time data. AI can also use NLP and chatbots to provide automated and personalized updates and notifications to the customers and stakeholders via various channels, such as email, SMS, or voice.

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Tanya W.

Procurement & Supply Chain Geek | Senior SAP Innovator | Transformation Evangelist |
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In my experience, AI can also integrate with IoT for real-time tracking and condition monitoring of goods, crucial for perishables. Secondly, AI's role in route optimisation, using traffic and weather data, ensures efficient deliveries, reducing time and fuel costs. Lasty, current AI teachnology available is also able to predict disruptions, suggesting rerouting or schedule adjustments, enhancing reliability and customer satisfaction by minimising delays.

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5 Customer service

A final aspect of logistics is to provide customer service and support before, during, and after the delivery of the goods and services. This can be demanding due to the high volume, diversity, and complexity of the customer inquiries and issues. AI can help improve customer service by using NLP and chatbots to handle the common and repetitive questions and requests and provide fast and consistent responses. AI can also use ML algorithms to analyze the customer feedback and sentiment and identify the areas of improvement and satisfaction. AI can also use NLP and speech recognition to enable voice-based interactions and enhance the customer experience.

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Tanya W.

Procurement & Supply Chain Geek | Senior SAP Innovator | Transformation Evangelist |
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We should also consider adding: -AI's integration with CRM systems to provide a personalised service, adapting interactions based on customer history and preferences. This enhances the customer experience by making it more relevant and targeted. -Also, incorporating advanced analytics for deeper insights into customer behaviour and trends can further refine service strategies. These two additions not only improve efficiency but also significantly elevate the overall customer experience.

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6 Here’s what else to consider

This is a space to share examples, stories, or insights that don’t fit into any of the previous sections. What else would you like to add?

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How can AI be used to improve logistics?

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6

1 Demand forecasting

2 Inventory management

3 Route optimization

4 Delivery tracking

5 Customer service

6 Here’s what else to consider

Information Systems

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How can AI be used to improve logistics?

1

2

3

4

5

6

1 Demand forecasting

2 Inventory management

3 Route optimization

4 Delivery tracking

5 Customer service

6 Here’s what else to consider

Information Systems

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