Authored by: William Xiong, Senior Vice President, Cainiao Group
While the traditional logistics ecosystem is often vulnerable to gaps and disruption, the advent of generative artificial intelligence (AI) could act as a unifying factor to achieve a more holistic value chain. Today, the application of cutting-edge technologies like Internet of Things (IoT), augmented reality (AR), and AI in logistics scenarios have been huge gamechangers, creating efficiencies and productivity boosts previously unimaginable.
With a projected market growth of 5.25 percent annually between 2022 and 2027, Asia Pacific’s logistics industry needs to capitalize on new technologies available to stay ahead of the curve.
Given the vast application scenarios and diverse range of algorithms, how can logistics operators maximize the adoption of generative AI technologies to drive industry competitiveness?
Building a Tech-driven Supply Chain
Amid surging eCommerce logistics demand, logistics operators have embraced digitalization to more efficiently scale their operations and elevate customer experiences. Of which, generative AI becomes pivotal in facilitating the processing of an exponentially growing volume and demand, allowing logistics operators and their customers to better access the global digital economy.
For example, generative AI can optimize decision-making processes by providing actionable insights. It is already delivering significant improvements across routine logistics operations in areas like demand forecasting for eCommerce logistics needs, delivery route optimization, and more, complementing the workforce to enhance overall efficiency and productivity.
As logistics operators integrate AI into existing systems as part of their digital transformation journey, this will free up resources to allow them to focus on other critical aspects that can drive growth and increase competitiveness.
Revitalizing the Logistics Talent Pool and Driving Employee Engagement
Partially attributed to general stereotypes about the nature of the industry and workforce, such as perceptions of it being labor intensive, the Asia Pacific logistics market continues to struggle with talent attraction and retention.
Beyond driving smarter supply chain management, generative AI will be an indispensable asset in revolutionizing talent development and retention. By streamlining workflows and empowering employees with more strategic work, generative AI fosters a greater sense of fulfillment within the modern workforce. In the same thread, employees can stay abreast of latest technologies and serve as competitive participants in the digital economy.
On the industry level, generative AI has the capacity to elevate logistics jobs. Not only do we witness the emergence of new jobs, such as prompt engineers, businesses are also exploring ways to diversify their workforce to remain future-ready and resilient. When managed responsibly, generative AI has the potential to redefine work and revitalize the logistics talent pool.
The Future of AI in Supply Chains
In the APAC supply chain market, generative AI alone is expected to expand at the fastest rate between 2023 and 2032. As such, logistics operators must embrace it as a strategic necessity to stay ahead and effectively navigate the evolving supply chain landscape.
Generative AI’s multifaceted capabilities has the potential to revolutionize supply chain operations by making them agile, efficient, and customer-centric. It empowers decision-makers, streamlines training processes, and acts as a catalyst in forging new digital frontiers, all while optimizing logistics and ensuring compliance.
It is without a doubt that this emerging technology will play a leading role in the future of supply chains, and logistics operators that are adaptable in leveraging emerging technologies will stand to gain a significant competitive advantage.