AI in supply chain management: How enterprises are rethinking warehousing

Benchmarks Nifty22,687.65-123.7FEATURED FUNDS★★★★★UTI Aggressive Hybrid Fund Regular Plan-Growth5Y Return8.76 % Invest NowFEATURED FUNDS★★★★★Motilal Oswal Midcap Fund Direct-Growth5Y Return18.76 % Invest NowEnter search text:

The Economic Times daily newspaper is available online now. Read Today's Paper AI in supply chain management: How enterprises are rethinking warehousing, forecasting and deliveryET SpecialLast Updated: Oct 22, 2026, 04:45:00 PM ISTSynopsis

AI is changing supply chain management by helping businesses forecast demand, position inventory, automate warehouses, and improve delivery planning. As quick-commerce companies build operations around speed, established enterprises are exploring how similar capabilities can improve efficiency across complex networks. The challenge is connecting systems and translating better predictions into measurable operational gains.

A product can be manufactured on time, stocked in a warehouse and still reach the customer late. The problem may lie in a demand forecast that missed a local surge, inventory sitting in the wrong location or a delivery route disrupted hours earlier. Across supply chains, small failures in coordination can become expensive by the time they reach the customer.

Artificial intelligence is giving businesses new ways to identify these problems earlier and respond before they affect operations. Its growing role in supply chain management is changing how companies forecast demand, allocate inventory, organise warehouses, and plan deliveries.

The decisions behind faster fulfilment

Quick-commerce companies have made inventory placement and order processing central to their business models. Their systems must anticipate what customers are likely to order in a particular neighbourhood and ensure those products are available nearby.

Zepto, for example, uses machine-learning models for demand forecasting and inventory management, alongside warehouse automation and route optimisation. Its technology helps determine where stock should be placed, how orders should move through fulfilment centres and how delivery partners should be assigned. These capabilities connect decisions that would otherwise be handled by separate teams or systems.

Also Read:

Live Events

Established businesses face a different set of constraints. Their supply chains may span factories, suppliers, distributors, warehouses and retail networks, often supported by systems built at different times. AI-driven forecasting can help planners anticipate changes in demand, while inventory analytics can identify where stock is accumulating or where shortages are likely. The commercial benefit depends on whether these insights lead to better purchasing, production and distribution decisions.

From warehouse efficiency to network-wide visibility

Warehousing is becoming an important testing ground for this approach. AI can help determine where frequently ordered products should be stored, improve picking routes, and flag disruptions as they emerge. Automated storage systems, warehouse management software and predictive analytics can work together to increase throughput without requiring businesses to expand physical capacity at the same rate.

The same logic applies beyond the warehouse. PepsiCo India has been expanding digital capabilities across agricultural procurement, manufacturing, warehousing, and transport planning. Its initiatives include digital shop-floor systems, warehouse management technology and AI-enabled transport control towers. The breadth of these applications illustrates how supply chain intelligence can extend from sourcing raw materials to moving finished goods.

The harder task is connecting these systems. A more accurate forecast has limited value if procurement cannot respond to it. Better warehouse productivity may fail to improve delivery performance if transport planning remains disconnected from order volumes. Supply chain gains increasingly depend on how well information moves between functions.

Can traditional supply chains learn from quick commerce?

Speed is one lesson. Quick-commerce operators have had to build processes around short fulfillment windows and constantly changing local demand. Established enterprises can apply similar principles to selected workflows, even when their operating models and delivery commitments differ.

However, faster decisions require reliable data, integration with existing systems and clear accountability when automated recommendations are wrong. AI implementation also carries costs, from infrastructure to staff training. Businesses need to establish where these investments will produce measurable improvements in service levels, inventory efficiency or operating costs.

These questions will be explored at the AI Business Transformation Masterclass & Awards 2026, presented by The Economic Times in association with IIM Bangalore. The supply chain track will examine AI deployment across procurement, warehousing and last-mile logistics, including what established enterprises can learn from newer, faster-moving businesses.

The masterclass will focus on the operational decisions involved in taking AI beyond isolated applications. The day will also feature the ET Most Innovative AI Product Awards 2026, recognising AI innovations delivering business value.

Register Now!
Add as a Reliable and Trusted News Source Add Now!
(You can now subscribe to our Economic Times WhatsApp channel)
Read More News onAI in supply chain managementsupply chain optimizationinventory managementwarehouse automationmachine learning in logisticsIIM BangaloreAI Business TransformationAI transformationAI masterclassAI adoption

(Catch all the Business News, Breaking News and Latest News Updates on The Economic Times.)

...moreless
(You can now subscribe to our Economic Times WhatsApp channel)
Read More News onAI in supply chain managementsupply chain optimizationinventory managementwarehouse automationmachine learning in logisticsIIM BangaloreAI Business TransformationAI transformationAI masterclassAI adoption

(Catch all the Business News, Breaking News and Latest News Updates on The Economic Times.)

...morelessContinue reading with one of these options:Limited AccessFreeLogin to get access to some exclusive stories
& personalised newslettersLogin NowUnlimited AccessStarting @ Rs120/monthGet access to exclusive stories, expert opinions &
in-depth stock reportsSubscribe NowET

Unlock Access to All Exclusives with ETPrime FREE TRIAL

15 Days Free: Unlock All ETPrime Exclusives, Market Tools & ePapers

Trial offer expiring in00 : 05 : 00

I'd rather pay ₹2599 now

Uh-oh! This is an exclusive story available for selected readers only.

Worry not. You’re just a step away.

Prime Account Detected!

It seems like you're already an ETPrime member with

Login using your ET Prime credentials to enjoy all member benefits

Log out of your current logged-in account and log in again using your ET Prime credentials to enjoy all member benefits.

Unlock ETPrime's Exclusive Stories Today!

Big Price Drop! Flat 40% Off

Student Only OfferAlready a Member? Sign In nowAlready a Member? Sign In nowAlready a Member? Sign In now

Offer Exclusively For You

Save up to Rs. 700/-

ON ET PRIME MEMBERSHIP

Avail Offer

Offer Exclusively For You

Get 1 Year Free

With 1 and 2-Year ET prime membership

Avail Offer

Offer Exclusively For You

Get 1 Year Free

With 1 and 2-Year ET prime membership

Avail Offer

Offer Exclusively For You

Get Flat 40% Off

Then ₹ 1749 for 1 year

Avail Offer

Offer Exclusively For You

ET Prime at ₹ 49 for 1 month

Then ₹ 1749 for 1 year

Avail Offer

Special Offer

Get flat 40% off on ETPrime

Avail OfferAvail OfferClaim NowAlready a Member? Sign In now

Need Assistance?

Connect with an ETPrime expert for personalized support and guidance

+91 9484700004'; }); } if(listing) { var h3 = "You tried reading " + listArr.length + " locked stories in the past " + threshold + " days.", h4 = "Become an ET Prime member and don't miss out on these exclusive stories."; var html = '

' + h3 + '

' + h4 + '

' + listing + '

'; $('#paidSCWidget').html(html); var callback = $('#paidSCWidget').attr('data-callback'); if(callback && window[callback]) { window[callback](); } customDimension.dimension72 += ' | Shown SYFT no Trial_With Missed Paywalled Articles Collection'; } else { _processNormal() } } }); } else { _processNormal(); } } catch (e) { _processNormal(); } }, function () { _processNormal(); }); //console.log('storyCollectionLoad', $); }

What’s Included with

ETPrime Membership

1Exclusive Insights That Matter

Uncover the truth with our investigative stories

Make strategic moves using the real-world case studies

Read industry-specific stories to identify emerging trends

Spot opportunities with
in-depth insights that matter

• Trump temper on H-1B visas is forcing Indians to do these things to stay put in US

  What Adani’s US indictment means for India Inc’s overseas fundraising

• Why veterans like Reliance, L&T are on acquisition spree? Aswath Damodaran has an answer.

  Will China’s dollar bond sale in Saudi Arabia trump the US in financial world?

• Huawei launches its own OS to compete with Google and Apple. But can it win beyond China?

  The problem with lab grown diamonds

• Why a falling rupee is a better option for the economy

  A list of top 20 momentum stocks that have delivered massive returns in one year

2Invest Wisely With Smart Market Tools & Investment Ideas

Alpha Trade

Get daily trade ideas from SEBI-registered research analysts.

Investment Ideas

Grow your wealth with stock ideas & sectoral trends.

Stock Reports Plus

All-in-one stock research with Stock Score, peer comparison & key signals.

BigBull Portfolio

Get to know where the market bulls are investing to identify the right stocks.

Stock Analyzer

Check the score based on the company's fundamentals, solvency, growth, risk & ownership to decide the right stocks.

Market Mood

Analyze the market sentiments & identify the trend reversal for strategic decisions.

Stock Talk Live at 9 AM Daily

Ask your stock queries & get assured replies by ET appointed, SEBI registered experts.

3Stay informed anytime, anywhere with ET ePaper

ePaper - Print View

Read the PDF version of ET newspaper. Download & access it offline anytime.

ePaper - Digital View

Read your daily newspaper in Digital View & get it delivered to your inbox everyday.

Wealth Edition

Manage your money efficiently with this weekly money management guide.

TOI ePaper

Read the PDF version of TOI newspaper. Download & access it offline anytime.

Deep Explainers

Explore the In-depth explanation of complex topics for everyday life decisions.

Health+ Stories

Get fitter with daily health insights committed to your well-being.

Personal Finance+ Stories

Manage your wealth better with in-depth insights & updates on finance.

5Enjoy Complimentary Subscriptions From Top Brands

Stream new documentaries from all across the world every day.

Stories you might be interested in