Artificial Intelligence in Logistics Function: Current Applications and Challenges

Supply Chain Management 0
Supply Chain Management
Student’s Name
9/29/2019

Supply Chain Management 1
Contents
Introduction................................................................................................................................2
Meaning of artificial intelligence...............................................................................................2
Benefits of artificial intelligence on logistics function..............................................................4
Challenges of applying artificial intelligence in logistics function............................................7
Current applications of artificial intelligence in logistics function of Fonterra.........................8
Recommendations....................................................................................................................10
Current applications of artificial intelligence in logistics function of DHL............................10
Recommendations....................................................................................................................12
Conclusion................................................................................................................................12
References................................................................................................................................14

Supply Chain Management 2
Introduction
The globalization of the business has increased the complexity in the business environment
and has developed the emerging need for the business to maintain its competitive edge over
its competitors. In order to maintain a competitive edge, it becomes vital for the organization
to implement artificial intelligence and allows the automation of the business process
(Krishnamoorthy and Rajeev, 2018). This will help the business in learning and examining
the unexpected problems in the external environment. It will help in structuring the massive
data and deliver maximum satisfaction to the customers. It will improve the supply chain and
will help the organization in fulfilling the fluctuating expectations of the consumers (Russell
and Norvig, 2016)
The additional paragraphs of the report will highlight the meaning of artificial intelligence
and its benefits and challenges to logistic function. It will also cover the current application of
artificial intelligence at the logistics function Fonterra and DHL. Further, it will reflect upon
the recommendations of the application of logistics functions on Fonterra and DHL.
Meaning of artificial intelligence
The term artificial intelligence is defined as a simulation of the human intelligence procedure
by machines specifically the computer systems. It includes procedures like learning in which
the focus in acquiring the new information and developing the rules for using the
information, reasoning, and self-correction. It comprises various tools including mathematical
optimization, methods based upon economics and probability and the versions of search. The
artificial intelligence system encompasses of agents and their environment. The agent may be
a human or robot that perceives the environment by using its sensors and acts upon that

Supply Chain Management 3
environment through effectors. The agent comprises the ability to set goals and achieve them.
It is able to make predictions of the uncertainties existing in the environment (Lu et al, 2018).
The main approach of artificial intelligence is to design a robot, computer or a product that
thinks in the same way as a smart human thinks. It involves the study of how the human
thins, solve the problem, learn, decides and work. The adoption of artificial intelligence
develops the ability to interact with the real world by perceiving and understanding the
situations. It aims at modelling the external environment by analyzing the unexpected
problems and solving them through effective planning and decision making. Through the
application of artificial intelligence, the organizations enable themselves to learn and be
updated. It allows the company to develop to make intelligent computer programs (Strong,
2016).
It allows the company to make rational decisions based upon the previous data record. It aids
the company in reducing the chances of error and allows solving the complex calculations
through the use of algorithms. The demands of the business are fulfilled without any delay.
The computer programming dos not get wear out easily and are able to perform the complex
job roles with ease. It is used by the advance organization to catch the frauds and brings
efficiency in the operations of the business. It is used to interact with the users and save the
need for human resources (Gladkov, Gladkova and Legebokov, 2015)
Artificial intelligence does not possess emotions and takes the rational decisions that enhance
the productivity of the company. They do not take the emotional decisions and do not get
distracted from any sort of emotions however the productivity of the organization is not
hampered. Application of the computer programs helps the company in performing the
repetitive jobs without the danger of error and also allows carrying out dangerous tasks with
adjustment of the parameters (Cockburn, Henderson and Stern, 2018).