McKinsey reports that AI is adopted by the logistics industry for four key business functions that cover almost 87% of logistics processes. Here are five ways supply chain executives are putting AI to work:

1. Demand forecasting

With AI-powered demand forecasting methods, organizations can use real-time information in their forecasts, reducing the level of error compared to traditional forecasting methods. The improved demand prediction accuracy can help the manufacturers optimize the operational costs with improved manpower planning. Meanwhile, local warehouses and retailers can enjoy reduced holding costs and increase the loyalty of customers, who are less likely to experience stock outs.

2. Warehouse management

A minority of companies have introduced AI technology to their warehouses, but futurists say it’s coming soon. AI integration will enable the warehouse to automatically detect package arrivals and update the delivery status. Also, computer vision may even enable bots to monitor the action of the conveyor belt to prevent traffic snarls.

3. Warehouse robotics to increase efficiency

The warehouse robotics market was worth a value of USD 2.28 billion in 2016 and is expected to grow at a CAGR of 11.8% between 2017 and 2022. The warehouse robots are one of the heavily invested AI technology in order to enhance the supply chain management of the businesses. In 2015, Amazon has acquired a technology-based organization and to implement and utilize warehouse robotics and today they have functional robots in 26 of Amazon’s 175 fulfillment centers, helping workers for picking, sorting, transporting, and stowing packages.

4. Autonomous Vehicles for efficient transportation

Eventually, self-driving cars may reduce dependency on human drivers and transform the logistics business. Emerging technologies like platooning, a technology that allows vehicles to ddrive in sync, like train cars, will reduce carbon emission and fuel usage of the vehicles even as it ensures driver’s health and safety. Tesla, Mercedes Benz, and other automotive giants are heavily investing in autonomous vehicles and some observers argue that it’s only a matter of time before self-driving cars and trucks dominate shipping.

5. Automating the back-office tasks

Hyperautomation, which is a combination of AI that includes robotic process automation (RPA), and process mining, helps businesses automate back-end tasks end-to-end. With such efficiencies and technologies in place, scheduling and tracking, report generation, invoice handling, email processing and other backend tasks can be performed in a seamless, error-free way.