According to a recent report, the global artificial intelligence in supply chain market was valued at approximately USD 491 million in 2017 and is expected to reach approximately USD 6,548 million by 2024, at a CAGR of around 44.76% between 2018
The increased popularity of Artificial intelligence across industries can be attributed to the development of computing power and storage, advancements in the algorithm, and the emergence of big data and IoT. Increasing use of smart robotics for autonomous vehicles is benefiting the supply chain planning. AI improves the supply chain visibility and risk to trace and predict the possible supply chain interference based on correlations and inputs across multiple data sources, including social media news and weather forecasts.
Increasing use of computer vision to reduce the time spent on repetitive tasks in supply chain is driving the growth of global AI in supply chain market. In the supply chain process, a lot of time is wasted on manual checking, especially when it comes to quality control. An automated machine called computer vision can detect good and bad part production, which helps in end-to-end automation. This technology helps to reduce operational costs and increases product accuracy. Rising adoption of automated guided vehicles in supply chain process is further anticipated to boost the AI in supply chain solutions globally.
With the development of AI and navigation technologies, such as machine vision and simultaneous localization and mapping, AGVs can enable automated material handling across conventional manufacturing boundaries. However, data security and privacy of IoT devices might hinder the expansion of the global AI in supply chain market. Furthermore, growing popularity of warehouse execution systems software in warehouse management is expected to propel the demand of the AI in supply chain market across the globe in the coming years. WES makes use of artificial intelligence to make current logistical systems more efficient over time.
North America is expected to have the largest market share in the global AI in supply chain market. Increasing usage of machine learning platforms in supply chain management by the U.S. manufacturers is primarily driving the growth of this market in North America. The U.S. automobile manufacturers manufacture their various automobile parts in many countries that need to be sent to distribution centers and dealers. For instance, Aera Technology, a U.S.-based technological company, developed supply chain management platform that includes machine learning to find patterns in supply chain data. This platform enables the manufacturer to keep a track of the entire supply chain, with products ranging from small screws to huge engines, and get actionable insights to reduce costs and improve efficiency. Furthermore, growing technological partnerships between supply chain management solution providers and AI vendors is expected to boost the adoption of AI in supply chain market in North America.
The European region is expected to show moderate growth for the global AI in supply chain market. Booming logistics sector in Europe has driven the growth of AI in supply chain market in the region. Logistics sector is one of the prominent industries in Europe, which generated USD 1.04 Trillion in revenue in 2017. Furthermore, the increasing development of intelligent warehouse management system software by European technology providers has boosted the demand for AI in the supply chain systems in Europe.
With the largest number of patents related to artificial intelligence, Asia Pacific is expected to grow at the highest CAGR in the forecast period. South Korea is expected to drive the AI in supply chain market in this region. South Korea has the third most patents related to artificial intelligence after the U.S. and Japan from 2005 to 2017. Growing adoption of the Natural Language Processing technology in retail supply chain further boosts the demand for AI in supply chain solutions in the Asia Pacific region. NLP analyzes customers’ behavior and improves their experience within stores.
Latin America is expected to witness a significant growth in the AI in supply chain market in the coming years. The region has competitive agribusiness supply chains which are strong players in the global markets. Hence, the need for AI in supply chain for agribusiness will surge the demand of this market in Latin America. Furthermore, the collaboration between organizations and government-owned enterprises in South Africa to optimize effective supply chain system is propelling the growth of AI in supply chain market in the Middle East and Africa.
Major players operating in the AI in supply chain market are Nvidia, Xilinx, Inc., Samsung Electronics, Intel Corporation, IBM, Microsoft Corporation, Amazon, Oracle Corporation, Cisco Systems, Google Inc., SAP SE, and LLamasoft, Inc., among others.
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