Use of Big Data and AI in Supply Chain Management

Arzan Azmi1, Hemraj Lamkuche 2*

Symbiosis Centre for Information Technology

1

Symbiosis Centre for Information Technology

*2

Symbiosis International (Deemed University), Pune, India

E-mail: azmiarzan@gmail.com

Abstract
In today's present digital era, we have witnessed a total transformation of the traditional
environment into a competitive marketplace comprising of various activities that have
influenced organizations to adapt to the changing patterns of the business environment. Every
organization is researching ways and methods to survive and compete among the various
competitors that are available in the economic environment, based on the data collected from
various sources dealing with supply chain management. Due to the expansion and
diversification of various industries, the development of technology to gather relevant data
has become a major requirement. Big data analytics and artificial intelligence devices have
provided with the platform that offers solutions to their problems by collecting data has and
valuable information in huge volumes that consists of real-time and relevant information. In
regards to supply chain management, artificial intelligence along with big data analytics have
helped and improved managerial practices to be more dynamic in nature. With the utilization
of artificial intelligence devices and methodologies, organizations have understood and
learned the importance of machine learning intelligence over human intelligence, and to a
certain extent has it helped improve the human decision-making process in areas related to
designing a business pattern that would be favorable and profitable to withstand the
unexpected market conditions. This paper helps understand the importance of big data and
artificial intelligence applications, also highlighting recommendations that can transform the
entire activities of the supply chain management into a wholesome experience.
Keywords: Artificial Intelligence (AI), Big Data, Supply Chain Management, Business
Operations, Organizational Environment.

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1.1 Introduction
Big data analytics and artificial intelligence programming devices have become an important
phenomenal prerequisite in the undertaking, operating, and sustaining a business endeavor.
Big data consists of accumulating huge volumes of complex data that assist in activities such
as maintaining updated records, future references, forecasting, and analyzing data to get the
maximum advantage of the possibilities lying ahead. (kaisler et al., 2013). Supply chain
management is considered to be an intense operational activity as it deals with areas such as
inventory, warehousing transportation, and delivery which contains and contributes to data
that needs to be analyzed on evaluating present task activity with future-oriented task activity.
Artificial intelligence and big data analysis are being gifted with extracting and
comprehensive complex information related to planning and forecasting the demand patterns
in the supply chain (Min, Yu, 2008), and decision-making process to help improve and
provide with solutions to solve problems related to crucial issues pertaining to the
organization’s managerial activities. In order to understand and capture the market, many
organizations are trying to adapt to using big data analytics as it is considered to be an
important segment in affecting the performance of the organizational operational activity.
(Akter et al., 2016)
Big Data Analytics and AI methodology are implemented in various organization activity
such as marketing, financing, manufacturing, warehouse, logistics and transportation,
customer relationship, supplier relationship (Zhong, Newman, Huang, Lan, 2016), which
ultimately helps improve the company’s growth and expansion of supply chain activities that
is reflected through the increase in sales volume and customer base increase by
comprehension and providing products and services to satisfy customer expectations.
To enhance big data analytics methodologies and gather relevant and up to date data,
organizations have implemented the use of artificial intelligence devices (Hokey, 2010) that
have helped to understand the changes taking place in the open market and formulate
strategies to convert the challenges into future opportunities that could help with the smooth
functioning of the supply chain management system. The ultimate goal of supply chain
management is to bring about an efficient system that coordinates between the various
departmental activities that contribute towards achieving the desired goals and meeting
targets to enhance the company's reputation and brand image in the market. In order to
maintain a good rapport with the various stakeholders,
Organizations have taken up initiatives to be prompt in there operational activities
understanding the importance of collecting and analyzing primary data resources have
utilized big data analytics that it has helped organizations to upgrade their operational activity
that could stand a chance in surviving the tight competition in the market environment (Saban
et al., 2017). With the help of Information Technology and the gigantic data collection from
resources. In order to meet the demand patterns in the economic environment, organizations
are keen on gathering data that could help with activity such as acquiring raw materials,
fabricating them to finish good, timely customer delivery, maintaining supplier relationship,
customer retention, maintaining the quality standards of goods produced, increasing customer
base and anticipating the competition that lies ahead in the markets.

1.2. Objectives of this study

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The objective of this study is to understand the concept of AI, big data, and supply chain
management and to comprehend the impact of Artificial Intelligence on Logistics. More
specifically, this study seeks to understand the impact of Big Data and AI on Supply Chain
Management. The rest of the study attempts to grasp the drawbacks of artificial intelligence
and big data. The paper is concluded by contributing possible solutions for future
improvement.

2. Literature review
Industries and business Enterprises that operate in the present era wholly depend on relevant
data to carry on their business venture. Also, as we speak of the digital era, we are witnessing
the transformation of traditional business practices into digital businesses that operate with no
limitations to boundaries whatsoever. As businesses expand their operational activities, there
are more data required to support the ongoing daily activities that would help industries and
business enterprises understand the present and forecast and future requirements.
Several organizations around the globe have adopted the system of using big data analytics to
practice an effective supply chain management system that could enhance their operational
activity to stand ahead of their competitors. (Benabdellah et al., 2016). The management
body has understood the importance of gathering and analyzing data to convert their
challenges into opportunities and benefit the entire supply chain management strategy, by
developing various models that could reflect in achieving the company's objectives. When we
take a look at the supply chain management scenario, it is without an issue of an uncertainty
that AI and big data, has demonstrated to be a wellspring of fueling the entire operational
activity. (Jelinek, Bergey, 2013). In this competitive world every company and industry tried
to be on top of the competitors, and with the help of big data analysis industries are able to
make an effective and efficient decision into their operational activities.

2.1. What is big data?

Every company that operates on a large scale survives with the use of information which
comprises both refined and grungy data that are essential to understanding the erratic
business environment and formulate strategies that could help the industry in reaching future
goals and objectives. And in the present digital era where industries are exposed to a global
market, introducing big data and AI into their operating systems and technologies is crucial to
withstand the tight competition that lies ahead of them. In the supply chain industry, customer
expectations and behavioral patterns are the basic lessons to industrial survival, as ultimately
customers are the key to sustainable activities.
It has become a necessity for or these Industries to adapt according to customer desire and
since there are numerous customers growing rapidly in the business environment, big data
analytics has proven to be a tool that keeps the tab on customer behavioral patterns. Big data
analytics has created a platform for various business enterprises to adapt to the changing
environment and help get a more profound insight into how to effectively improve the entire
supply chain with the use of real-time data. With the combination of artificial intelligence and
big data analytics, there is a greater added bit of leeway to the entire standpoint of supply
chain management.
2.2. Quantitative approach

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When we focus on the term supply chain, it directs the thought processes to the quantity
involved in managing and operating the functionality prerequisites of supply chain scenarios.
Organizations are stressing on taking various measures to develop the supply chain patterns
and transform their operative from a traditional supply chain system of practice a modernized
and flexible system of supply chain management practices, that it involves the collaboration
of various suppliers and resource personals to create value and products that could satisfy
customer requirements and specifications. (Saban et al., 2017) All the departments should
collectively work together and have a common understanding of achieving the set goals and
desired tasks in order to create a proficient supply chain system. Several organizations are
directing their capital investments to upgrade and implement the latest technology involving
AI and big data analytics devices to improve the overall perspective of transforming the input
of physical raw materials into to finished products that furthermore reflects on the increase in
financial assets of the company's operations
2.3. By what means can big data influence supply chain management?
In order for business enterprises to make effective decisions dealing with large scale
operational activities, the sources of data that are acquired from quantitative methods have
demonstrated to be more effective in comparison with qualitative data analysis. Big data
analysis focuses on quantitative sources of information that have helped business enterprises
to make effective decisions dealing with supply chain management. Big data analysis has
also proved to be more efficient then existing methods and software of data collection tools
as the most fascinating criteria of big data are the ability to collect information on a daily
basis from the large customer base that is available in the market environment both
domestically and internationally. With the end goal for organizations to sustaining and
survive the unexpected market conditions, supply chain patterns should be e creative and
flexible to adapt to changing scenarios in the market place (Lee, 2004)
There are numerous reports of supply chain industries and manufacturing units that have
encountered failures and difficulties due to the lack of relevant information required to
improve performance functionality. The inability to collect and process relevant data could
lead the entire supply chain industry into a pitfall leading to the fatality of risk and cost
exposure. With the help of artificial intelligence, several industries are able to you positively
impact by collecting sources of data that could help with supply chain decision making to
formulate strategies that could improve the efficiency of the company’s entire operational
activities.
And as enterprises grow and expand into the new market horizons, analyzing data could be
the key to success. Big data analytics provides enterprises with vital information and data
that provides a clear picture of each and every activity. Real-time data is gathered right from
the physical locations where the business operates to forecasting customer expectations and
demand derivatives that are very essential for understanding the behavioral patterns of
customer purchases and meeting their demands. This data provided by artificial intelligence
and big data analytics can help with the overall foresight of the company’s supply chain
aspects.
2.4. Future Prediction
One of the most significant aspects of business enterprises utilizing the data collected from
artificial Intelligence and big data analytics is to help businesses to analyze the present
scenario and conjecture the future happenings. And with the help of these future predictions,
there are several added advantages that could help the business industry to reduce feature
expected cost and increase their capital and revenue gains. Hence it is very important that

4
real-time data is being analyzed and studied in order to understand the overall dynamics of
the supply chain system and survive among various competitors in the present and future
unexpected business environment

Big data + Supply chain

management

Future Supply chain

Prediction gain

Figure 1: A graphical representation depicting the influence of big data on supply chain
management.
2.5. Supply chain gain
So as to guarantee smooth functioning of the supply chain system, the overall operational
activity off of the warehousing, logistics, and transportation, the retailers, and the service
sectors have to work hand in hand to gather more noteworthy results. Gathering data from
artificial intelligence tools and devices can provide various information that could help carry
on the supply chain operational activities. Data can be collected right from the inventory
chart of the warehouse, analyzing transportation services and route with the help of the GPS
that would detect and predict the traffic conditions and the road safety to carry heavy
merchandise to deliver to the scheduled location, which could save mishaps for accidents and
avoid a heavy loss that could incur. And as we perform in the digital markets, artificial
intelligence and data analytics could help major challenges that deal with issues such as
efficient and timely delivery, global market conditions, inventory detail, customer
expectancy, and available competitors in the market. By adapting to the resources of artificial
intelligence devices and big data analytics, business enterprises can perform efficiently by
meeting customer demands, meeting future expectations, and minimizing there are factors
that would reflect on the supply chain system and lastly furnishing and offering customers
with a wholesome fulfilling experience.
Along these lines, big data analysis is considered the right tool that helps make strategic
decisions in supply chain management, as it covers all the areas of the operational activity.
The main areas of activities that big data analysis looks into you are given below as follows.

Planning Production Warehousing Transportation Retailers

Figure 2: A graphical representation focusing on the main areas of activity series involving
big data analysis.
These various areas of activity series involving big data analysis may be discussed below as
follows.

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6
2.5.1. Planning
One of the most conspicuous step before performing any activity is the involvement of the
planning process. Regardless of whether it be a small scale industry or a large scale enterprise
in the business world, the planning process is the most significant activity that can have a
greater impact on supply chain management. Effective gathering, analyzing, and planning of
data from big data analytics can emphatically reflect on the operational practices practiced by
where is organizations (Choi, Wallace, Wang, 2018). With the available tools that derived
data and information related to customer expectations and experiences, supply chain
processes can be planned in advance with the use of big data analysis so that interruptions in
the business activities can be minimized to a greater extent (Feng, Shanthikumar, 2018). In
the wholesale or retail business activity, areas such as production and supply go hand in hand
with the customer demand, henceforth it is exceptionally essential that planning is very
essential to ensure there are no hurdles in the supply chain process.
2.5.2. Production
The production industries need to break down plenty of factors involved during the process to
ensure that they have strategies to sustain and venture in the long haul time frame. There are a
lot of activities that are involved in introducing a particular product that involves the
conversion of raw materials into finished goods. To get the production process running there
are a lot of parameters that are to check on getting information about running the entire
process. With the use of big data analysis, enterprises dealing with the production process are
able to keep a tab on data dealing with the overall production process looking into the minute
details such as the maintenance of the machines, quality of products produced, number of
defective items, spare part requirements. And from the producers’ point of view, it is very
crucial and essential to overlook into to minute details to ensure that the production process
continues with no potential obstacle.
2.5.3. Warehousing
Large scale Enterprises is uncommonly dealing with supplying good to retail stores have to
invest a ton of capital in upgrading the technology and the storage capacity to ensure they
have a competitive advantage over other wholesale operators. Industries that produce goods
on a large scale basis have a lot of inventory requirements to have an estimate of the expected
production requirements in the coming future. With the help of the latest digitalized
technologies and big data sources, statistical reports and inventory reports are collective in
real-time which includes activities that monitor minute subtleties of the warehousing
operational activities. The data collected can be used to identify possible errors hand find
ways and measures to minimize the negative outcomes.
2.5.4. Transportation
So as to get the manufactured goods out of the warehouse to various retail distributors,
transportation is exceptionally essential to get the produced goods on the move. It is very
important for or the warehousing agencies to maintain an accurate and timely report that
gives information on the number of goods dispatched from the warehousing units. Big data
analysis enables the transportation process to be more efficient among their competitors by
undertaking services in logistics (Ayed, Halima, Alimi, 2015), and improving in their
activities by analyzing the number of goods that could be carried to avoid overloading the
transport unit ensuring a successful delivery process.

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2.5.5. Retailers
At the point when we focus from the selling point of view, it is very important to analyze
from the customer perspective, in order to give the customers what they expect and stand tall
among the various competitors in the business environment. Big data analytics tools have
proven to be a very significant tool that could induce multiple distribution channels and
increase networking system to market their products and services by gathering and analyzing
data from various resources that are linked with the marketing channels of the supply chain
frameworks (Prasad, Zakaria, Altay, 2018).
With the utilization of big data analysis, crucial information is derived that includes the
behavioral patterns of the customers, tactics to attract the customers, statistical records of
goods sold, inventory data of available stock, defective goods, customer complaints, and
gauge future expectations of customer demands.
2.6. Optimizing supply chains through artificial intelligence applications
Supply chain management comprises of series of activities that involve various departments
and enterprises to perform delegated obligations and responsibilities, so as to guarantee
timely and accurate customer service experiences. With the increasing demand from the
customer base, there has been a lot of data required to analyze and comprehend customer
requirements and implement and integrate the necessary changes in the supply chain process.
In order to maximize organizational revenues, data analyzed through the applications of
artificial intelligence devices can accurately help understand and forecast the demand and
supply mechanism and to help minimize the challenges and issues by taking precautionary
measures. There are several uses of artificial intelligence applications to enhance supply
chain management.

Visibility

Formulating Efficiency
strategies
Optimizing supply
chains through AI

Customer Supplier
experience relationship

Figure 3: A cyclic representation supply chains optimization through AI applications

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3. Discussions
3.1. Visibility
With the accumulation of historical data and analyzing information and data received from
real-time sources, organizations are able to get a clear picture of the operational activity and
could formulate strategies to improve their supply chain activities. Since artificial intelligence
devices are connected with all of the organizational activities, improvement imperceptibility
of the operational activities is accurate which helps in understanding the current scenario of
where the organization is at present.
3.2. Efficiency
By analyzing the data collected from artificial intelligence application, the supply chain
management has improved a lot in their overall efficiency by finding ways to improve and
boost the productivity in the supply chain and forecasting futuristic demand patterns have
helped industries to the warehousing operational activities and the inventory systems.
Through numerous fruitful experiments and evaluations, various techniques have been
implemented that has helped gather data accumulate sources from secondary data records,
present scenario and futuristic goals that could help induce enhance customer behavior
through forecasting techniques by analyzing the collective data (Jeong, Jung, Park, 2002),
these analyses largely influences the decision making of the management by implementing
innovative changes on their products and services that could satisfy the futuristic demand of
customers.
3.3. Supplier relationship
In order to select and maintain an effective supplier, it is essential to satisfy the standards and
requirements of certain aspects such as maintaining a decent credit score, timely delivery of
goods, higher quality of goods, regularity in due installments, and fulfilling supplier demand
and proposals (Nissen, Sengupta, 2006). Numerous studies suggest that artificial intelligence
devices can effectively manipulate the process of connecting with targeted suppliers based on
their reviews from previous track records. And to fulfill these prerequisites, it is very
important together data on a regular basis that could give a clear picture of the current
scenario to help the company make better decisions in improving supplier relationships.
3.4. Customer experience
Customer satisfaction is the ideal objective of many organizations as, in return generates
higher revenue collection and increases the customer base. The interaction between the
customers and the business environment (Baxter, Collings, Adjali, 2003), is very crucial as it
has a prominent possibility of increasing company reputation and brand image through new
experiences shared by customer review, which in turn benefits the organization through
increased revenue Returns and expansion of customer base. As organizations grow and
expand their business operations across the globe, it becomes a greater task to identify and
understand individual customer requirements. In any case, with the utilization of AI
technologies, business manufacturers are able to assess the requirements of the customers
beforehand and produce goods that it would satisfy their specific needs by accumulating data
from virtual assistance programs monitored by artificial intelligence devices.
3.5. Formulating strategies
Capital investment on artificial intelligence technologies and devices have help organization
to simplify their planning process and formulate efficient strategies that could benefit the

9
overall functionality of the business operation, by using statistical data and real-time
information. Business enterprises are able to ace the technique of forecasting future
requirements and a locket available resources that could be used in the most effective manner
to ensure that there is no delay or hurdles in the operational activities undertaken by business
enterprises.
3.6. Impact of artificial intelligence in Logistics

Figure 4: A graphical representation of the impact of AI in Logistics

3.6.1. Future perspective

With the tools available in the utilization of artificial intelligence, several industries that
manufacture and produce finished goods are able to analyze data to help with forecasting
likely customer demands that would take place in due course of time. By collecting data
companies can move there resources both capital and material in the most appropriate manner
that could benefit the company and help utilize limited resources and gain maximum revenue.
3.6.2. Programmed robots
In huge numbers of the manufacturing industries of the present era, robotic assistance has
proven to be the most effective and efficient method of getting the work done within the
stipulated time frame. Generally, when we here at the word artificial intelligence, we are
drawn to visualize and automated operative machine or robot that has taken over activities
that were previously performed by humans. With the use of the advanced technology
comprising of coding and computer languages and algorithms, manufacturing industries have
gained access over there performance by permitting robots to perform and operate in a
specific manner that has demonstrated to deliver alluring outcomes.
3.6.3. Data analysis
With the implementation of artificial intelligence devices and tools, data assortment and
analysis have become very convenient and informative producing up to date data about the
entire supply chain operational activities and assisting in helping enterprises to accurately
deliver cutting-edge information about future performances and setting realistic future
objectives, AI have also minimized the workload of humans involving in computation and
analysis of data which has a greater advantage of eradicating human error calculations, does
benefit the entire business enterprise maximum.

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3.6.4 Real-time surveillance
In the supply chain sector, there are numerous activities that are performed which involve
various agencies and enterprises working together to achieve the desired results. Furthermore,
to keep an accurate record of the events and activities happening in and around the business
environment it is humanly impossible to monitor each and every movement happening
outside the internal environment, but with the use of AI devices and big data analytics,
enterprises are basically able to watch and track over every movement is happening globally
hence creating a smooth movement of products and services.
3.6.5. Automated vehicles
Transportation is an essential prerequisite so as to physically move manufactured goods from
the industries to various business enterprises for further selling of goods to meet and satisfy
customer requirements and desires. Also, by and large cases, the delivery of goods from the
industry to the retail warehousing units takes a lot of time as the travel days to reach the
required destination are long. but with the use of Advanced technology e that are
programmed digitally through artificial intelligence devices, many developed country have
implemented the system that allows transportation services to be more safe and efficient by
infusing technology that provides the option of autopilot, lane assistance and automatic
braking features which have proven to minimize several accidents and mishaps that could
have occurred.

4. Drawbacks
Despite the fact that there are several benefits of using big data and AI methodologies in
enhancing supply chain management procedures, there are certain drawbacks due to which
many organizations failed to implement and utilize these digitally enhanced methodologies
into practical use. The following drawbacks maybe explain below as follows
4.1. Heavy capital
For organizations to implement and utilize these digitally advanced techniques and practices
of data acquisition and analysis through artificial intelligence and data analysis tools, there is
a huge amount of capital requirement involved to replace old methodologies and converting
practices of using artificial intelligence to the fullest. Due to a lack of sufficient capital, many
organizations fail to enhance the supply chain management system.
4.2. Human inclusion
In spite of the fact that we have learned about the working models of utilizing AI devices and
big data analytics tools, there is always a requirement for human control and involvement in
making decisions that are required for the functionality of an effective supply chain
management system. there is no doubt that these data collection tools provide real-time
information and help accumulate data over various undertakings of the organization but
nevertheless without decisions made by humans it is impossible to draw conclusions to the
existing data collection.
4.3. Skill deficiency
Organizations are taking measures to supplant the old approaches of gathering information by
switching gears on implementing artificial intelligence devices and big data analysis tools. It
has become a challenge and a complicated process as replacing the Machines involved

11
replacement of skilled labor, as well as many of the existing employees, are not equipped
with the technical skills that help analyze the data collected by bye these machines. In order
to switch the operating activities into machine learning, the entire body of laborers should
have to advance in learning the necessary knowledge requirements to analyze and understand
the data collected.
4.4. Security measures
As artificial intelligence methodologies involve collecting data of various business
operational activity, there are the odds of greater risk, if they are not administered and
monitored appropriately. Many of the data collected for analyzing and interpreting measures
to improve supply chain management could also so be used against the organization if it falls
in the wrong hands. There additionally raises the issue of privacy as it is impossible to keep
the information confidential when being monitored by automated machines all through the
day. And since AI technologies are still a new concept in many business enterprises that deal
with activities such as manufacturing and warehousing, information can be e disastrous if it is
used in an inappropriate manner.
4.5. Data-dependent
Although every department in the organization function within their parameters depending on
the responsibilities and obligations doled out can emerge a scenario where employees and
management will start to fully depend on the data that is being collected. Although the data
collected through these artificial intelligence devices there can be a possibility of some
vulnerability, which could have a disastrous effect while making strategic and managerial
decisions if the data acquired is insignificant.

5. Recommendations
The recommendations include encouraging employees and management to adapt and
embrace machine learning techniques using AI and Big data. Adequate capital should be
allocated to capital investment on utilizing AI and big data applications. Organizations ought
to defeat the deficiency of supply chain talent and recruit qualified supply chain analysts. A
qualified team should be identified to investigate AI capabilities that provide big
opportunities to the organization. Additional time and resources should be contributed on
planning activities that would increase the value to supply chain management. And lastly
precautionary measures should be taken to safeguard data to reduce potential risk and
fraudulent activities.

6. Conclusion
The management team, within the organization, is accountable for formulating strategies that
reflect on both the organization’s internal and external environment. Resource allocation and
analysis has become a significant requirement in many of the managerial decision that
revolves around the supply chain methodologies. Decision making related to supply chain
activities will be effective only when there is a communication chain between various data
experts analyzing information collected from various sources of activities. In the present
years, AI and big data analytics technology have provided with a medium that permits the
nonstop gathering of pertinent information that could be utilized to enhance the learning
process of data experts to make efficient strategic decisions in regards to supplying chain

12
management. Supply chain manager role activities have totally transformed from traditional
methodologies of delivering goods and services into our knowledge-oriented system of
managing activities that could help understand and connect with customers and suppliers
across the external environment. In spite of the fact that there are certain loopholes in
accessing devices that operate on artificial intelligence technology and deriving data from
sources such as big data analytics, continuous improvements are taking place to ensure
improved efficiency in accessing and accumulating data that would lead to a promising future
in the overall areas of supply chain management.
Acknowledgement
The authors wish to acknowledge Symbiosis Centre for Information Technology for
providing the resources for research.

Conflict of Interest: There is no conflict of interest among the authors

Funding: Self-funded

Ethical approval: Not applicable

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