Artificial Intelligence in Supply Chain Optimization: A Case Study of Indian SMEs

Abstract

Artificial Intelligence (AI) has the potential to transform supply chain management, especially for small and medium-sized enterprises (SMEs) in developing economies. This case study focuses on Indian SMEs and their adoption of AI tools to optimize supply chain processes. We interviewed 40 supply chain managers and analyzed data from 25 SMEs across various sectors, including manufacturing, retail, and logistics. The findings suggest that AI applications, particularly in demand forecasting, inventory management, and supplier relationship management, have significantly improved operational efficiency. However, barriers such as high implementation costs, lack of skilled personnel, and data security concerns limit widespread AI adoption. The study emphasizes the need for government incentives and training programs to facilitate AI integration in SMEs, helping them remain competitive in an increasingly digital global market.