Artificial Intelligence in Supply Chain Market Analysis | 2023-2029

“The Artificial Intelligence in Supply Chain Market is expected to grow from USD 3.15 billion in 2022 to USD 30.75 billion by 2029 at a CAGR of 38.5% during the forecast period”.

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Market Dynamics

Introduction

Artificial Intelligence (AI) in supply chain refers to the use of AI technologies to enhance supply chain processes and optimize supply chain management. AI can be used to automate tasks, analyze data, and improve decision-making processes. For instance, AI can be used to optimize supply chain planning, forecast demand, and improve inventory management.

Machine learning algorithms can analyze large amounts of data and identify patterns of behavior, enabling manufacturers and suppliers to predict demand and optimize production and delivery schedules. Additionally, AI can be used to monitor and analyze supply chain performance in real time, enabling companies to identify potential issues and respond quickly to changes in demand or supply.

The use of AI in supply chain management can improve operational efficiency, reduce costs, and enhance supply chain visibility. Overall, AI is transforming the supply chain industry by enabling companies to work smarter and more efficiently.

Market Drivers

The primary factors fueling the growth of this market include the increasing volume of big data, the rising need for greater visibility and transparency in supply chain information and operations, and the growing adoption of AI to enhance consumer services and satisfaction. However, a major challenge facing the market is the scarcity of experts in the field of artificial intelligence technology.

The demand for supply chain work methods that are transparent and observable is a significant driver of the market. The increasing prevalence of big data and analytics technologies, fueled by the emergence of artificial intelligence (AI), has further contributed to this trend. Within the logistics sector, AI is being widely utilized for autonomous data processing in areas such as warehouse stock management, inventory management, product safety, and timely delivery. These are just a few examples of the essential features that are propelling the adoption of AI in the supply chain market.

Furthermore, the market is also being propelled by increasing government regulations and initiatives that are promoting machine automation and AI computing. Currently, a growing number of government standards and regulations are affecting nearly all stakeholders in the supply chain industry, including both public companies and individual suppliers. However, in developing countries, several limitations hinder the adoption of effective supply chain information solutions.

Therefore, governments are taking various initiatives and making significant investments to raise awareness and incorporate advanced technologies in business operations. These investments enable businesses to achieve their designated digital transformation objectives while also serving customers efficiently.

The use of AI technologies in supply chain operations eliminates the need for human effort, resulting in significant savings of both time and money. This operational advantage of AI technology is a key driver in the market. Large companies are increasingly investing in machine automation to reduce operating costs in future operations. Numerous end-user industries are relying on various AI applications in the supply chain market segments, which is contributing to the growth of the industry. Based on these recent trends, the industry is poised for continued expansion.

The increasing adoption of Internet of Things (IoT) devices and cloud computing services has the potential to revolutionize data processing. Big data technology is already being widely used in the logistics and supply chain industry. The trend towards supply chain automation, particularly through the use of Artificial Intelligence (AI), suggests that the need for automated solutions in the industry will continue to grow and evolve. As 5G networks and IoT technologies become more prevalent, machine automation is expected to become even more efficient, further driving demand for AI-based data processing solutions.

Despite the positive trends, the market growth rate is likely to be limited by several factors. One such factor is the scarcity of technological expertise in underdeveloped and developing economies. Additionally, a shortage of skilled workforce and the rising costs associated with hiring and training personnel could impede market growth. Furthermore, the lack of robust infrastructure facilities in less developed economies and the challenges associated with coding artificial intelligence could also present obstacles to market expansion.

Recent Developments

• In January 2023, SymphonyAI, a leader in high-value enterprise AI SaaS for strategic industries, collaborated with Oracle to offer SymphonyAI solutions on Oracle Cloud Infrastructure (OCI) using key services such as Oracle Exadata Database Service, GPU-accelerated computing, and performance monitoring.
• In November 2022, Microsoft launched the Microsoft Supply Chain Platform, which helps businesses maximize their supply chain data estate investment with an open approach, collaboration, security, low-code, and SaaS applications in a composable platform.
• In November 2022, AWS launched AWS Supply Chain, a new application that helps organizations increase supply chain visibility to make faster, more informed decisions that lower costs, mitigate risks, and improve customer experiences.
• In June 2022, EY Allied Logility, Inc., a supply chain and retail planning solutions supplier, to help businesses improve their outcomes through insights-driven supply chain management.

Segments Analysis

By Technology Type

“The computer vision market is expected to see substantial growth in the coming years”.

The market is segmented into machine learning (ML), natural language processing (NLP), context-aware computing, and computer vision, depending on the technology used. Among these, the market for computer vision is projected to experience substantial growth. 

The increasing adoption of computer vision for autonomous or semi-autonomous applications in industries such as manufacturing and automotive is driving the growth of this technology in artificial intelligence in the supply chain market.

By End-User Industry Type

“The consumer-packaged goods industry is poised to achieve the highest CAGR during the forecast period”.

The market has been segmented into automotive, aerospace, manufacturing, retail, healthcare, consumer-packaged goods, food & beverages, and others. Of these, the consumer-packaged goods industry is expected to experience the highest compound annual growth rate (CAGR) during the forecast period. 

The adoption of AI in the consumer goods industry is on the rise, as it can collect data, interact with customers, capture images, and more. These changes are having a lasting impact on customers' expectations.

Regional Analysis

“North America led the Artificial Intelligence in Supply Chain market in 2022, while the Asia Pacific region is forecasted for the highest CAGR”.

The market has been segmented based on region, including North America, Europe, Asia Pacific, Middle East and Africa, and South America. In 2022, North America dominated the AI in supply chain market, holding the largest market share. The region's significant share can be attributed to the presence of developed economies that are prioritizing the enhancement of existing supply chain solutions, along with the presence of key players in the industry and a strong inclination towards adopting advanced technologies.

The Asia Pacific region is projected to experience the highest compound annual growth rate (CAGR) during the forecast period. The market growth can be attributed to the increasing adoption of deep learning and Natural Language Processing (NLP) technologies for applications in automotive, retail, and manufacturing industries in the Asia Pacific region. Furthermore, the presence of major players in the AI in supply chain ecosystem contributes to the growing adoption of artificial intelligence in the Asia Pacific.

Key Players

The following are the key players in the Artificial Intelligence in Supply Chain Market (arranged alphabetically)

• Amazon
• Cainiao Network (Alibaba)
• ClearMetal
• Deutsche Post AG DHL.
• FedEx
• IBM
• Intel
• LLamasoft, Inc.
• Logility
• Micron Technology
• Microsoft
• NVIDIA
• Oracle
• SAP
• Samsung Electronics
• Splice Machine
• Xilinx

Note: The above list does not necessarily include all the top players in the market.

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More than 1,000 authenticated secondary sources, such as company annual reports, fact books, press releases, journals, investor presentations, white papers, patents, and articles have been leveraged to gather the data.

We conducted more than 15 detailed primary interviews with the market players across the value chain in all four regions and with industry experts to obtain both qualitative and quantitative insights.

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