Chatbots: How Can they Transform Logistics and Supply Chain Management? 

When it comes to logistics and supply chain management, the demand for incorporating cutting edge technology – within the web and mobile app development – is now at an all-time high for several reasons. From the globalization of business operations, to the never-before seen demand for transparency, accountability, and performance, these factors together have made innovative technology in supply chain management an irreplaceable commodity.

While Big Data analytics, artificial intelligence, and Machine Learning has already made its way into the supply chain management, intelligent Chatbots have recently been introduced to the advantage of the logistics companies and their clients. Chatbots in recent times has evolved as a crucial technology to deliver a competitive edge to any supply chain management company.

To explain how Chatbots are really making an impact on the supply chain management and logistics, let’s begin with some important statistics.


Where Chatbots in Supply Chain Stand? Digging the Statistics

Chatbots are increasingly getting popular in supply chain management and the latest Supply Chain Report clearly shows this with a figure. 79% of companies back in the last quarter of 2016 said they are not going to use Chatbots in their business operation or as part of a digital interface. Now when surveyed in the second quarter of 2017 51% of them have said that they are already using Chatbots in various capacities.

On the other hand, Chatbots are also rapidly evolving and there are too many different types of Chatbots out there to help people interact with businesses and engage in a conversation without any manual help. Only in 2016, as many as 34,000 different conversational chatbots have been built for various capacities. The Chatbots Market Report published in 2018 made the prediction that the Chatbot market will have an annual growth rate of 27.5% in the period between 2018 and 2024.

An Oracle Survey which has been conducted among the senior executives from various nations came with the finding that 80% of these companies are already using Chatbots or are planning to use them by 2020. The same survey also indicated that the Chatbots have made a cost-saving contribution of $20 million in 2017 and it will save more than $8 billion costs per year by 2022.

All these statistics and reports clearly show how big an impact Chatbots are going to make on the supply chain management. Businesses seem to be increasingly getting on their feet to take on the opportunity of using custom chatbots for business growth and for an uplifting brand image through an engaging and efficient conversational interface.


How Chatbots Ensure End-To-End Visibility In The Supply Chain Industry?

In supply chain viewing the state of transporting materials and time and date of the supply is a crucial factor to ensure optimum efficiency. Traditionally, it works with a lengthy booking number or tracking code which is tracked on a web page form. This slow and time-consuming exercise is often under-productive as the information is not available in real-time.

Moreover, the web form interface which doesn’t need any authentication with specific login information can actually be exposed to potential misuse. Apart from such risks of misuse and inefficiencies, sometimes such web forms simply stop working in case of accidental circumstances when the information cannot be accessed at all.

With the use of Chatbots, all these limitations and shortcomings can be mitigated quite convincingly. Chatbots capable to answer queries in real-time can come with answers aptly while always preventing misuse by authenticating the user. This becomes possible because Chatbots have access to real-time data stored in the Enterprise Resource Planning (ERP) systems of the company.

They can easily get access to all the information relating to the status of shipments and orders and supply the information instantly when they are asked for. In case of accidental delay, Chatbots can notify the user and Chatbots by applying artificial intelligence can try to retrieve data when needed.

Chatbots allows complete visibility of the shipment by delivering timely updates and all information about possible delays. Moreover, by offering round the clock conversational interface Chatbots remain accessible all the time to supply information that the users need. Thanks to Chatbots, the customers in the very bottom of the pipeline can track the status of an order and it’s shipment in granular details, right from the placing of an order to the delivery of the product at the doorstep.

Last but not the least of all advantages is that Chatbots being present across web and app interfaces in various parts of the world can communicate in the very language of the audience.


How Chatbots Work as the Virtual Supply Chain Assistant?

Chatbots are intelligent now thanks to the latest technologies like AI and Machine Learning. With AI Chatbots now play the role of virtual supply chain assistant and it works great for the B2B audience.

In the B2B supply chain, dealing with losses caused by increased procurement cost due to accidental circumstances is quite a matter of concern. Chatbots by being integrated into the system can actually help manufacturers by informing about the change of lead time and possible price hikes. Working as an inbuilt tool an intelligent Chatbot has access to a varied range of data ranging from the prices of the raw materials, events, supplier locations, the timeline of the pricing history and various delivery schedules. Access to such multifaceted and crucial information helps manufacturers adjusting the production to trending factors that can impact the cost.

The delay in delivery often causes stress in the manufacturing process and procurement. This is why meeting deadlines is considered so crucial for the entire sector. An AI Chatbot working in combination with the ERP system can offer a big help in understanding and tracking the dynamics of procurement. It can help by providing prior information and responses based on the circumstantial situation.


The Role of Chatbots In Procurement

One of the most important roles played by Chatbots is visible in the procurement process. The intelligent AI-based Chatbots working in collaboration with the ERP and SRM (Supplier Relationship Management) systems can instantly reply to queries with most updated information and thus can make the procurement process smoother.

An intelligent chatbot is also equipped about the risk factors involved with a mismatched invoice, defective materials or sudden upsurge or decrease in market demand for the B2B audience. Since p Chatbots have access to all information about orders, they can work as a consolidated conversational interface to deliver an omnichannel experience to the customers. Access to information and capability to high-funda analytics together help to reduce the errors and loopholes that can have detrimental effects on the procurement process.

  • Chatbots In Shipping And Logistics

As for the end-user customer who needs to track down the delivery of a scheduled order Chatbots offer an array of advantages. The Chatbot capable to store the shipping code within the chat interface can instantly reply tracking the code when you ask “hey, what is the status of my package?” As soon as you ask the bot it comes with a blip and status update on the screen. Apart from this instant help for tracking your shipment, you can also stay constantly in touch throughout the shipment journey.

Chatbots have helped starting a series of innovations in logistics and supply chain management. The data collected from the conversations through Chatbots helps logistics companies to decide about the best shipping and delivery routes and schedule. The logistics are optimised through the use of data-driven insights delivered by intelligent Chatbots.

  • Chatbots Offer 24/7 Customer Support In An Industry Where Time Is Critical

In the supply chain, time is very crucial and any delay or process slow-down needs to be addressed at the earliest. The issues must be resolved to minimise the impact on the delivery schedule and timing. Chatbots offering a real-time 24/7 interface can help supply chain management to enjoy more competitive edge thanks to increased efficiency and timely delivery.

A Chatbot helping to resolve the end-user queries and reducing the anxiety concerning the delivery of the products plays a great role for B2C companies as well. The Chatbots being used along with the customer support team can actually deliver a comprehensive solution to solve customer queries. The human agent can take over the conversation where the Chatbot left.


Chatbot Use Cases

Now that the impressive role of Chatbots for supply chain management is quite clear to us, we should exemplify with some use cases. Let’s take 2 use cases of Chatbots and explain them briefly here.

  • Chatbot Use Case: Admin and Guide for Procurement

This particular use case has a lot of similarities with the B2C segment uses. Here the Chatbot works as the procurement assistant to augment the procurement process and make things easier for the customers.

The bot proposes solutions to the customers on the basis of identified requirements and procurement strategy corresponding to the preference of suppliers, items and contracts.  The best thing is, the approval for the procurement also can be communicated through the Chatbot conversation. The Chatbot procurement ensures that the process works efficiently and in compliance with the rules and standard procedures.

  • Chatbot Use Case 2: Chatbot for Operational Support

Chatbots can really play a great role in offering operational support in the capacity of an assistant. How the queries are managed by the Chatbots is a great example of how it can ensure operational support. Offering answers to all sorts of queries and working almost like an informed procurement official is an ideal use case for Chatbots.



Chatbots came as a great blessing for many industries where processing information in real-time is of great significance. In the supply chain management and logistics, Chatbots is likely to incorporate automation in many processes benefiting both the businesses and the end of the funnel customers.


Author Bio

Atman Rathod is the Co-founder at CMARIX TechnoLabs Pvt. Ltd., a leading web and mobile app development company with 13+ years of experience. He loves to write about technology, startups, entrepreneurship and business. His creative abilities, academic track record and leadership skills made him one of the key industry influencers as well.

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