Artificial Intelligence (AI) in Supply Chain Market | 2031

Report Description

The global Artificial Intelligence (AI) in supply chain market size was USD 2.2 Bn in 2021 and is likely to reach USD 42.8 Bn by 2030, expanding at a CAGR of 45% during 2022–2030. The growth of the market is attributed to the rising adoption of advanced technological solutions and the growing utilization of cloud-based solutions to improve operational efficiency by enterprises in emerging economies.

Artificial Intelligence (AI) technology enables software, machines, and systems to enact in a similar way that human intelligence functions in order to analyze certain data and take decisions based on it. The decision-making and functionality of Artificial Intelligence (AI) improve consistently, as the amount of collected data increases over time. Artificial Intelligence (AI) systems run complex algorithms on data to analyze large data sets and make the most suitable decisions.

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In the supply chain, there is a wide range of applications that can be performed using Artificial Intelligence (AI) technology to improve overall supply chain performance. These operations include data extraction, analysis, supply and demand management, and operating autonomous vehicles.

Moreover, with the help of Artificial Intelligence (AI) technology, warehouse operations such as product storage, packing, sending, receiving, and management can be effectively enhanced.

Most of the existing supply chain solutions take extra time, labor, and other resources to complete simple operations. On the other hand, implementing Artificial Intelligence (AI) technology aids in optimizing overall operations in the supply chain, which in turn helps businesses improve quality and performance.

COVID-19 Impact

The COVID-19 pandemic helped in boosting global Artificial Intelligence (AI) in supply chain market growth. Across the world, there were lockdowns imposed by the governments, to curb the virus spread, which caused disruption in the supply chain process. However, deploying advanced technological solutions such as Artificial Intelligence (AI) allowed businesses to carry on activities with little or no human intervention required.

Furthermore, the rising adoption of technology solutions and the growing benefits derived from them are helping businesses to optimize their operations and serve their customers efficiently, owing to which the global market is expected to expand further.

Market Dynamics

The research report presents a complete overview by providing detailed information about the current market trends, existing drivers, growth opportunities and potentials, and emerging challenges. The global Artificial Intelligence (AI) in supply chain market report has up-to-date insights about market dynamics and market scenarios that can shape the overall market performance and output during the forecast period, 2022 to 2030.

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Which Factors are Driving the Demand for Global Artificial Intelligence (AI) in Supply Chain Market?

Rising Need to Optimize the Supply Chain Operations

The rising need to optimize the supply chain operations in order to make them speedier, more visible, and transparent is expected to drive the global Artificial Intelligence (AI) in supply chain market growth during the forecast period. The inclusion of intelligent business solutions such as Artificial Intelligence (AI) in supply chain enabled companies to reduce their expenses and also improve their overall logistics and supply chain operations in recent years.

Moreover, Artificial Intelligence (AI) technology combined with big data analytics is enabling businesses to improve their customer experience management. As businesses look for acquiring and providing for customers from all over the globe, it is important for them to optimize their processes to serve customers efficiently and on record time.

The Artificial Intelligence (AI) technology, not only enables cutting lapses in supply chain and warehouse operations, to make them faster but also helps in reducing costs. The increasing benefits provided by implementing Artificial Intelligence (AI) solutions in automation are anticipated to drive the global market during the projection period.

Which Factors are Restraining the Growth of the Global Artificial Intelligence (AI) in Supply Chain Market?    

Increasing Data Safety Concerns Across Business Sectors

The increasing data safety concerns across the business sectors are expected to hamper the global Artificial Intelligence (AI) in supply chain market during the forecast period. The data produced across the business’s operations have high value for companies in generating profits and future opportunities. Data safety concerns are rising across the world, owing to the increasing cyber threats of various types.

If the companies do not invest in implementing high-security measures to their data, technologies, or network system, there is a big risk of leaving it open to cyber risks. Cybercrimes such as ransomware, malware attacks, and phishing attacks, among others are rising, owing to which the global market growth is anticipated to restrain in the coming years.

What are the Growth Opportunities in the Global Artificial Intelligence (AI) in Supply Chain Market?

Growing Use of Supply Chain Analytics Solutions

The growing use of supply chain analytics solutions in improving the operation efficiency of logistics and supply chain operations is expected to create substantial growth opportunities for the global market in the coming years. Supply chain analytics is beneficial for businesses in making faster, smarter, and more efficient decisions.

Moreover, analytics solutions also enable the prediction of future trends, which is helpful for organizations to take decisions such as which product is to be maximized and which is to be minimized in the near future. Furthermore, supply chain analytics can be deployed at the warehouse to monitor its operations, and also analyze responses from partners and customers to make better-informed decisions. The key players in the global market have started developing and offering advanced analytics solutions which can analyze structured and unstructured data records, to provide organizations with advanced alert systems to help them make timely key decisions.

Scope of the Report

The global Artificial Intelligence (AI) in supply chain market research report includes an assessment of the market trends, segments, and regional markets. Overview and dynamics have also been included in the report.

Market Segment Insights

Which Major Factors influence the Significant Growth of the Machine Learning Segment?

Wide Adoption of ML in Automation and Effective Warehouse Management

On the basis of technology, the global Artificial Intelligence (AI) in supply chain market is segmented into Computer Vision, Machine Learning, Context Aware Computing, and Natural Language Processing. The Machine Learning segment held the largest share in 2021, and it is expected to continue growing at the fastest rate during the forecast period. Automated quality inspection, effective warehouse management, and error reduction due to Machine Learning solutions are key factors in driving segment growth in the global market.

Computer Vision segment is also expected to grow rapidly in the global market in the coming years, owing to the rising use of computer vision/machine vision technology to streamline operations in supply chains. The segment growth is owing to the benefits computer vision technology provides in constant monitoring, inspecting, and securing the assets of the organizations.

How is the Software Segment Generating More Revenue Share in the Global Artificial Intelligence (AI) in Supply Chain Market?

Automating Hardware-based Operations in Supply Chains and Logistics

Based on the component, the global market is divided into hardware, software, and services. The software segment is anticipated to hold the largest market share during the projection period, owing to the growing use of software in automating hardware-based operations in supply chains, across the sectors. The software-based services enable the smooth handling of operations in an organization as compared to hardware or services.

The hardware segment is expected to grow the second fastest owing to the rising need for smart hardware solutions for increasing automation in warehouse, logistics, and supply chain operations. Demand for smart hardware is growing, as it is expected to help companies in minimizing errors and speed up operations. The hardware segment, owing to the automation benefits it provides, is expected to grow further in the global Artificial Intelligence (AI) in supply chain market in the coming years.

What are the Key Aspects that Boost the Supply Chain Planning Segment?

Rising Demands to Enhance Production Planning and Factory Scheduling

On the basis of application, global Artificial Intelligence (AI) in the supply chain market is categorized into supply chain planning, warehouse management, inventory management, freight brokerage, fleet management, risk management, and others. The supply chain planning segment held the largest share of the market in 2021 and is expected to expand at a substantial CAGR during the forecast period.

The segment growth is attributed to the rising demands to enhance production planning and factory scheduling. Moreover, the optimization and agility in decision making, enabled by Artificial Intelligence (AI) in supply chain planning is expected to boost the global market growth in the coming years.

The warehouse management segment is also expected to grow rapidly in the coming years, owing to increased demand for automating warehouse operations to minimize errors and bring maximum efficiency. Moreover, artificial intelligence solutions in warehouse management help in minimizing direct and indirect labor expenses. Additionally, the smart Artificial Intelligence (AI) solutions help in keeping regular checks on warehouse operations and also suggest ways in which efficiency can be improved.

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What are the Major Reasons for High Revenue Generation in the Retail Segment?

Rising Use of Retail E-commerce Software

On the basis of end-user, the global Artificial Intelligence (AI) in supply chain market is divided into retail, manufacturing, automotive, aerospace, healthcare, consumer-packaged goods, food & beverages, and others. The retail segment holds the largest share of the global market and is anticipated to continue to be the leading segment during the projection period.

The rise of retail e-commerce software in recent years is boosting the retail segment’s growth. Major retail e-commerce providers including Amazon and Walmart are utilizing smart Artificial Intelligence (AI) solutions to effectively serve their customers and also to manage their fulfillment operations.

The automotive segment is expected to be the second fastest-growing segment in end user, owing to the rapidly growing automotive industry across the globe. Artificial Intelligence (AI) is highly helpful for the automobile industry in keeping track of product quality throughout the supply chain process. Artificial Intelligence (AI) solutions can not only enable efficient management of warehouse operations for the automotive industry but also help in optimizing the logistics process, to reduce unnecessary errors or delays.

Why North America Dominates the Global Artificial Intelligence (AI) in Supply Chain Market?

Highest Adoption of Artificial Intelligence (AI) Technology in Supply Chain by E-commerce Players in the Region

In terms of region, the global Artificial Intelligence (AI) in supply chain market is divided into Asia Pacific, North America, Latin America, Europe, and Middle East & Africa. North America is expected to dominate the market owing to the highest adoption of Artificial Intelligence (AI) technology in the supply chain operations in the region by e-commerce players such as Amazon, eBay, Walmart, and Overstock, among others. Additionally, the presence of key market players is helping with the development and early adaptation of innovative Artificial Intelligence (AI) solutions for supply chain management in the region.

Asia Pacific region is projected to be the second fastest growing in the global Artificial Intelligence (AI) in supply chain market. Asia Pacific is expected to gain substantially during the forecast period, owing to the growing number of tech-focused medium and small enterprises in the region. Moreover, the rising adoption of deep learning and NLP technology by the major end-user industry in emerging economies is also expected to drive global Artificial Intelligence (AI) in supply chain market growth in the region.

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