AI: The Fourth Wave of Supply Chain Innovation

AI can help with almost any issue, from creating a custom recipe with the ingredients in your pantry to analyzing complex data sets. But while that recipe might turn out to be delicious, is AI really effective when the stakes are higher—like when your business’s profits are on the line? 

Lori Boyer, host of the Unboxing Logistics podcast, invited Benjamin (Ben) Gordon from Cambridge Capital onto the show to help answer that question (find the full episode here). 

She and Ben address the big issues on the minds of business owners and logistics professionals: what’s going on with AI today, what the future holds, and how being an early adopter can give you a competitive edge.

Is the AI boom just a hype cycle, or something more?

Those responsible for their company’s shipping—whether they’re dedicated logistics managers or small business owners wearing many hats—are always looking for ways to save time and money. Lots of AI tools promise exactly those results, but the technology is so new that some are skeptical.

To understand what AI can do, and whether it really lives up to the hype, Lori asked Ben to compare today’s “AI boom” to “earlier waves of tech hype in logistics.”

To begin, Ben acknowledged that “on one hand, we are in a hype cycle.” But that doesn’t necessarily mean that AI is all flash, no substance. In fact, he believes the exact opposite is true. He noted that shipping and logistics are very process-intensive and document-intensive. By automating manual processes and ensuring data accuracy, AI can change the game for shippers.

And with natural language processing, AI is easy to use. As Ben put it, “You don’t have to be an engineer to use it. … You or I … can use AI to do things that took much more technical training before.”

Ben summarized his thoughts by pointing out that for early adopters, AI has the potential to “be a tremendous source of productivity gain.”

Where AI offers the most value

AI can help with countless logistics tasks, from the warehouse to final delivery. But Ben believes that it’s particularly useful for customer-centric processes. 

The customer experience is one of the biggest challenges for businesses. With competition at an all-time high, even small shipping mistakes can cause loyal customers to shop elsewhere. But retention is critical; after all, as Ben points out, “The cheapest new customer is always keeping the one that you already have.”

That’s where AI comes in. When customers have a question about tracking and visibility, artificial intelligence tools can provide accurate, straightforward answers, without the need for time-consuming phone calls or email exchanges.

Ben drives the point home: “The supply chain is the weak link in the brand process. … There’s no excuse in the world of AI today to not have an instant answer to a customer question.” 

Point solutions vs. all-in-one tools

Should you build a tech stack with a wide variety of AI tools or go all-in with a single comprehensive solution? According to Ben, “In the early stages of innovation, the point solutions are almost always better.”

However, he clarifies that in the next three to five years, more platforms will be able to offer integrated, multi-solution solutions—tools that “do it all.”

The fourth wave of innovation

Ben can track four waves of innovation in the supply chain industry. The first three innovations revolutionized the way we transport goods, ultimately leading to our globalized economy:

1. The transcontinental railroad. In the U.S., the transcontinental railroad made it possible to quickly move goods from coast to coast.
2. Shipping containers. By speeding up the loading and unloading processes, protecting goods from damage, and minimizing theft, shipping containers paved the way for low-cost international shipping.
3. The internet. With the rise of ecommerce, businesses could connect easily with shoppers across the world. Shipping became “faster, cheaper, better than ever before.”

So, does AI have a place on the list of transformative innovations? Ben thinks so.

“The fourth wave, in my view, is … about how people can use AI to make better decisions.”  

He notes that only time will tell if his predictions about AI adoption are correct, saying, “This would be a good topic to look back on three years from now.” 

Hear the rest of the conversation

To hear the rest of Ben and Lori’s conversation about the transformative power of AI, watch or listen to the full podcast episode here.