AI in Logistics and Supply Chain Management Market

Global AI in Logistics and Supply Chain Management Market (2024 to 2029):

The Global AI in logistics and supply chain management market is predicted to reach USD 34.59 billion in 2024 and USD 54.21 billion by 2029, growing at a CAGR of 9.40% during the forecast period.

In today’s connected virtual world, reducing uncertainty and maximizing productivity have become top priorities across industries. Additionally, rising expectations for supersonic speed and operational efficiency have underscored the need to leverage the power of artificial intelligence (AI) in logistics and supply chain management. Logistics and supply chain AI provides powerful optimization capabilities for more accurate capacity planning, improved demand forecasting, increased productivity, reduced supply chain costs, and increased production while promoting safer working conditions.  These intelligent systems rapidly analyze and interpret massive data sets to provide timely advice to forecast supply and demand. Some AI systems are so advanced that they can predict and discover new consumer habits or predict seasonal demand. This level of AI application helps predict future trends in customer demand while minimizing the costs of overstocking unnecessary inventory.

Global AI in Logistics and Supply Chain Management Market Drivers:

Modern businesses rely heavily on technology. Large companies have IT departments to manage and maintain business processes, but most startups and small businesses do not have IT department systems. This is due to the additional costs associated with the IT department. Therefore, most small businesses and start-ups use these cloud SCM systems and enjoy the benefits of IT departments through cloud management systems without hiring additional staff at additional cost. This makes it easier for internal employees to focus on their day-to-day work. The storage flexibility of a cloud-based supply chain management system provides scalability. This is very important for SMEs and helps them with unpredictable growth in the first year of business operation. Additionally, cloud-based SCM provides small businesses with robust inventory management that is highly responsive to the latest business trends. SMEs can also use cloud-based SCM systems to drive corporate strategies that increase sales and profits. Therefore, AI in the logistics and supply chain management market is anticipated to grow during the forecast period, and a high adoption rate among SMEs will create significant opportunities for cloud supply chain providers.

Advances in information and communication technology have facilitated the evolution of supply chains, creating growth opportunities for AI in logistics and supply chain management. Technologies such as IoT, cloud, 5G, blockchain, AI, 3D printing, and robotics are all critical to enabling the digital utility networks of the future. GPS monitors can track everything from package location to current temperature, providing up-to-the-minute facts for logistics professionals to fully understand how supply chains work. As the COVID-19 pandemic continues, real-time tracking is helpful for high-value items. With the help of batch data and device check-in, all shipments' supply chain phases can be mapped and checked.

Global AI in Logistics and Supply Chain Management Market Restraints:

Organizations deploying AI-based logistics and supply chain management systems face security and privacy concerns. Companies have sensitive data that can affect the entire business's reputation and must be protected to avoid data breaches or theft. Corporate data can be leaked over the Internet or accessed by unauthorized users, an increasing problem for businesses. For instance, a cloud-based transportation management system requires a multi-tenant architecture where a single software version runs on servers shared by multiple customers. Therefore, corporate subscribers may be able to view competitor data. These security issues related to data access by unauthorized users can also threaten a company’s data security and competitive position. Therefore, these issues related to security and privacy will increase corporate concerns and restrain AI in logistics and supply chain management market growth over the forecast period.

Impact of COVID-19 on the global AI in logistics and supply chain management market:

After the severe disruptions caused by the COVID-19 pandemic, companies across the globe are looking to re-evaluate their supply chain strategies to become more agile, collaborate, and connect with consumers, suppliers, and other stakeholders. To do this, it invests more in supply chain technologies such as AI, robotic process automation, and restraining employees. Demand and supply shocks caused by the US-China trade war and the COVID-19 crisis are forcing manufacturers around the globe to reassess their supply chains. Soon, they will be pressured to increase inventory and replenish on time. However, the AI in logistics and supply chain management market size is set to have a prominent growth rate in the coming years.

REPORT COVERAGE:

This research report on the global AI in logistics and supply chain management market has been segmented and sub-segmented based on the enterprise size, verticals, and region.

Global AI in Logistics and Supply Chain Management Market - By Enterprise Size:

• SMEs

• Large Enterprises

The SME segment is leading with the dominant share of AI in the logistics and supply chain management market as it offers flexibility and scalability and reduces costs. Implementing logistics and supply chain management solutions and services would lead to an increase in the turnover of SMEs, the desired results, and an improvement in the efficiency of business operations. However, SMEs face three critical challenges- capital, skills, and scalability. To solve these problems, SMEs adopt a pay-as-you-use model, a cloud usage model that offers the flexibility to manage the IT infrastructure according to their needs. SMEs are witnessing stiff competition from large companies. Therefore, to gain a competitive advantage, they adopt AI-based logistics and supply chain management services that enable quick response, timely decisions, and overall improvement of company productivity. This trend is expected to propel the SME segment share during the forecast period.

Global AI in Logistics and Supply Chain Management Market - By Verticals:

• FMCG (Food Moving Consumer Goods)

• Retail & E-commerce

• Healthcare

• Manufacturing

• Automotive

• Transportation & Logistics

• Others

During the forecast period, FMCG is gaining traction over the largest AI in the Logistics and Supply Chain Management Market. In the FMCG segment, having the right product and quantity at the right time is extremely important. Additionally, timely delivery of perishables is a crucial challenge for all food and beverage retailers. SCM solutions and services provide FMCG companies with real-time supply chain visibility, business intelligence, and operational cost reduction. These capabilities enable immediate processing and optimization of orders, efficient transportation cost management, shipment routing, and on-demand delivery of products. The need to improve inventory optimization is driving the growth of the FMCG segment.

Global AI in Logistics and Supply Chain Management Market - By Region:

• North America

  • The United States

  • Canada

  • Rest of North America

• Europe

  • The United Kingdom

  • Spain

  • Germany

  • Italy

  • France

  • Rest of Europe

• The Asia Pacific

  • India

  • Japan

  • China

  • Australia

  • Singapore

  • Malaysia

  • South Korea

  • New Zealand

  • Southeast Asia

• Latin America

  • Brazil

  • Argentina

  • Mexico

  • Rest of LATAM

• The Middle East and Africa

  • Saudi Arabia

  • UAE

  • Lebanon

  • Jordan

  • Cyprus

North American AI in the logistics and supply chain management market holds prominent shares with the adoption of technological advancements in AI-based logistics and supply chain management. This region is an early adopter of global AI-based logistics and supply chain management solutions and services. The US holds the largest share of the AI-based logistics and supply chain management market in North America. SCM services have been adopted by many verticals in the region, including BFSI, L healthcare, retail, manufacturing, and retail. Rising IoT trends and a focus on streamlining supply chain functions such as logistics, warehousing, order fulfillment, manufacturing, and transportation management have increased the need for AI-based logistics and supply chain management market in the region.

Asia Pacific AI in logistics and supply chain management market growth is following North America in leading the significant shares. India and China are the major countries contributing the largest shares to the market.

KEY MARKET PARTICIPANTS:

The major companies operating in the global AI in logistics and supply chain management market include SAP, Oracle, Infor, Descartes, IBM, Manhattan Associates, Blue Yonder, Coupa, Trukky, Zycus, OMP, ZAGGAER, GEP, and MOST

RECENT HAPPENINGS IN THE MARKET:

• In May 2022, Kinaxis showcased a new analytical approach, Planning AI, delivering breakthrough advances in advanced analytics for supply chain planning.

• In March 2022, Descartes announced that the multi-carrier parcel and LTL shipping solution, Descartes Ship-Rush, has been integrated with the company’s e-commerce warehouse management system suite. This integration will enable consumers to improve warehousing and shipping performance through an integrated solution.