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Supply Chain AI: Putting the ‘AI’ in Supply Chains

By May 3, 2018 February 22nd, 2019 No Comments
Supply Chain AI: Putting the ‘AI’ in Supply Chains

With the fourth industrial revolution or industry 4.0, traditional supply chain management has undergone a complete digital makeover. The elements of supply chain and logistics in the age of Industrial IoT have become more complex, with more and more nodes in the distribution network and wider territorial coverage. Automation has enabled better management of the flow of goods and services, advanced analytics, cutting-edge warehousing and inventory management strategies.

The IT systems and ERP (Enterprise Resource Planning) reside within the company, while operational logistics are usually outsourced. This paradigm shift within the supply chain industry has given rise to the need for a seamless integration of end-to-end processes in real-time.

As digitization transforms supply chain management, new technologies are being implemented to continuously enhance performance. A report published by EyeForTransport (EFT) highlights a changing trend in the way supply chain businesses are applying AI technologies. To better manage supply chain operations, businesses are engaging chatbots. From 21% in Q4 2016 to 51 % in Q2 2017, there has been a whopping increase in chatbot deployment in supply chain processes.

Although inspired by the front-end use of chatbots in e-commerce, supply chain management activities are now using chatbots throughout the chain of processes – procurement, booking, cargo tracking, end-to-end visibility, feedback on delivery, and much more.

 B2B and B2C

Chatbots built for supply chain businesses are able to deliver information swiftly. They are connected to the back-end systems to retrieve information as well as facilitate internal communication. This results in customer queries being answered instantly and more efficiently. Supplies (B2B) or online purchases (B2C) are delivered cheaper and faster.

In both B2B and B2C, the supply chain chatbot becomes the main touchpoint for the corporate or end-user, triggering future purchase decisions based on speed in delivery and customer experience.

Chatbots: Enabler For End-To-End Visibility In The Supply Chain Industry

What does a supplier do when he wants to query the status of his raw materials or supply date? He enters manually the lengthy booking number or tracking code on a web page form. This is not only cumbersome, but also futile as often the information is not available in real-time.

The web form interface usually does not require user verification or log-in, which exposes the data for potential misuse. Where the supply of good or service is met with unexpected incidents like the delay on account of inadequate supply or say accident of a carrier, information is not available unless you call customer support. This is fraught with delays, often requiring repeated contacts for updated information about the arrival of the shipment. However, with a chatbot, the process becomes simpler and efficient.

Chatbots have access to real-time information in the resident ERP systems. They have the ability to retrieve the updated status of shipments and orders, instantly. Moreover, once the tracking code is entered, the chatbot stores it in its memory, and can, upon request, automatically present status updates. In the case of instances like delays, the precise delivery time can be requested and the chatbot implements its AI for data retrieval.

Additionally, chatbots support multimedia content and provide the information visually as in a real-time tracking on map. In B2B, images of the actual package or contents can be shown, so in the event of say, transit damage, the customer knows what he is receiving, and this information can be used to claim insurance.

Chatbots enable complete supply chain visibility from tracking shipments, status updates giving reasons for possible delays, to picking up requests and lodging claims. Such real-time process intelligence supports back-end actions like addressing probable production or shortage issues. A 24/7 access to chatbots ensure visibility across the entire supply chain process, including an industrial IoT system.

Once an order is placed, a customer can track its status end-to-end from warehouse to the doorstep in granular details. A return process or order rectification also becomes simpler. Chatbots enable customer self-service along the entire supply chain process.

Companies that operate across the world, have separate sites or web pages for different countries. The chatbots are designed to handle your query in the resident language.

Chatbots: the Virtual Supply Chain Assistant

The chatbot is further empowered by AI to act as a virtual assistant in the B2B delivery.

Often businesses incur huge losses when procurements cost overshoot on account of unforeseen circumstances. The chatbot integration can inform the manufacturer when lead-times change so prices can also change. The built-in AI can use data on raw material prices, supply chain events, supplier locations, historical pricing and delivery schedules to quote prices or adjust production capacity to suit seasonal trends.

When commitments in sales and delivery time fail, it leads to stress in production as well as logistics. This places demands on every stage of the supply chain process to meet deadlines. The AI chatbot pairs with the resident ERP to understand and track changing dynamics in procurement, for suitable response and prior information.

Your supply chain/logistics chatbot also has the ability to perform out-of-the-box functions across the chain, just as a virtual assistant would do.

Stepping Towards Predictive Analytics For Data-Driven Insights And Optimization

Chatbots can collect a huge amount of data – customer habits, product preferences, the frequency of queries, customer lifecycle value, the percentage of fulfilled orders, the location of suppliers, and so on. So the chat based messaging platform of the chatbot becomes a mine of valuable information. As all the data like customer ID or tracking order is stored, the same can be retrieved for instant status update without delays.

Insights into the customer data provide enhanced customer engagement and help predict customer requirements for a seamless user experience. At the same time, the supply chain data is also analyzed for performance appraisals across various process networks – material planning, procurement, warehouse and fulfillment, distribution, delivery, repairs, and returns.   

Using predictive analytics and ML, the chatbot becomes smarter and more intuitive over time. It can forecast demand for different products in different locations, predict changes in trends and enable suppliers and manufacturers to quickly adapt to meet the demands. The huge amount of data generated through chatbot conversations, also have the potential for contributing to industry performance surveys.

Chatbots In Procurement

The chatbot is plugged into the businesses’ ERP and SRM (Supplier Relationship Management) system. Powered by AI and cloud-based applications, the chatbot can answer supply queries with efficiency and speed. A chatbot has intelligence about supplier risks and understands in depth what a single mismatched invoice, material defect or sudden market demand can mean for a B2B customer using the services of the company. As it has all the data related to an order, the chatbot can engage the stakeholders or customer for an omnichannel satisfactory experience. Using ML capabilities, the bot learns about the customer experiences and inefficiencies within the supply chain system, to help reduce errors and speed up procurement.

Conversational interface (CUI) definitely goes without saying another buzzword for the supply chain industry in 2018. Instead of hiring dozens of human agents, AI assistants become the new effective and efficient substitute to perform simple automated tasks – answering customer queries like inventory levels and overall costs as well as selecting and purchasing goods. The introduction of Chatbots into the supply chain industry undoubtedly revolutionizes the functionality of virtual customer service and the quality of user experience.

Chatbots In Shipping And Logistics

Tracking packages and orders have become easy with the chatbot. As the bot can store your shipping code within the messenger interface, you can just type, “hey, where is my package?” and you immediately get a blip and status update on the screen. What’s more, the chatbot in supply chain engages you throughout the shipment journey, even requesting you a convenient time for delivery followed with notification in case you were not present at the time of delivery.

Innovations have fired the use of chatbots in logistics. The data collected from chatbot conversations are used to revisit or develop optimal shipping routes and schedule, use location detection technologies for collaborating with logistics providers, and derive green logistics data for optimization in the process.

Chatbots Offer 24/7 Customer Support In An Industry Where Time Is Critical

In B2B, supply status, shipment locations, date of arrival, and other related information is available 24/7 in real-time. Chatbots can also let the customer interact with the service provider or supplier through a chat window for resolutions of an issue. In a cutting-edge industry, where time is of utmost importance, chatbot use and innovative applications can make the ultimate difference when choosing the supply chain company.  The advantage of chatbot acting as a virtual assistant for real-time support can also give a business competitive advantage.

The user-friendly conversational interface of the chatbot supports B2C queries. When chatting does not give all the answers, the functionality of the chatbot allows for switching to a human agent to resume conversation where the chatbot left. The customer is assured of 24/7 information to satisfy his anxiety. A chatbot has the ability to tie the best of conversational commerce’s customer-facing front end to the back end of the logistics side of a business’s operations, delivering accurate and timely updates to the customer from the source. 


Chatbots are bringing about great transformation in the way supply chain processes are planned, performed and integrated. So chatbot use in supply chain industry is increasing manifold with innovative functions designed to handle the growing complexities of the supply chain. This has also brought phenomenal growth in the industry, as businesses are able to focus on planning and strategizing orders and supplies, instead of handling customer queries and grievances.

Gerardo Salandra

Gerardo Salandra

Gerardo Salandra is the CEO of Rocketbots ( An IBM & Google veteran, with deep expertise in growth hacking, machine learning, and chatbots. Chairman of the AI Society of Hong Kong, promoting the development and understanding of AI technologies in the Region.

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