How to Use Chatbot in Warehousing and Supply Chain: A Detailed Guide

The demand for incorporating innovative technologies in supply chain operations is at all all-time high right now and it’s due to several reasons. 

From the globalization of businesses to the demand for transparency (read Corporate Transparency Act by FinCEN Report Company), accountability, performance, and faster delivery, all these factors have made innovative technology an essential part of supply chain operations.

Technologies like artificial intelligence, big data, machine learning, etc. have already paved their way into the supply chain industry sometime back. And now, chatbots are also acknowledged as an equally important technology in the supply chain industry. Chatbots alongside equipment management software are going to allow companies to streamline warehouse operations and optimize supply chain efficiency.

In this article, we’re going to discuss the use of chatbots in warehousing and the other entities of a supply chain, use cases of chatbots, and their future predictions.

So without any further ado, let’s get to it!

What are Chatbots?

Chatbots are a new form of Artificial Intelligence (AI) that has proven to be the next disruptive technology in the supply chain industry.

A chatbot is a software program that simulates a human conversation either through text or voice interaction. 

They help to streamline the interaction between customers and businesses while improving the customer experience in the long run.

To be successful, however, your chatbot must be able to perform its tasks effectively. 

Plus, you also need to decide on the type of chatbot you want to use in your supply chain operations. 

Your chatbot can be either open or closed depending on your specific requirements. 

Open chatbots use artificial intelligence to process human language and learn from their interactions with your customers. Closed chatbots, on the other hand, only execute an exclusively defined conversation script.  

Where Do Chatbots Stand in the Supply Chain Industry?

Chatbots have become the fastest-growing brand communication channel in the supply chain industry.

According to the state of conversational marketing report by Drift, chatbots usage as a brand communication channel has increased by 92% since 2019. Furthermore, the same report also revealed that 24.9% of customers used chatbots in 2020 to communicate with a business.

Another report forecasted that the chatbot market will witness a 31% annual growth rate between 2018 and 2024.

The Oracle survey also revealed that chatbots turned out to be a cost-saving asset for businesses and helped save $20 million in 2017. And the same amount is predicted to reach $8 billion by 2022.

All these reports prove how big of an impact chatbots are going to make in the supply chain industry. In fact, they’ve already revolutionized almost every entity of a supply chain in some way. 

Below, we’re going to discuss how chatbot usage in the supply chain has impacted its components.

Order Management

For the longest time, order management has been a manual task in supply chain operations. But since the arrival of chatbots, all order management related tasks can now be either expedited or automated. 

Be it creating new orders, checking the status of orders in progress, delayed orders, or cancelled orders, a chatbot can manage everything efficiently and ensure timely delivery of all orders when unified with a reliable micro fulfillment center

Inventory Management

Inventory management is one of the most laborious tasks in the supply chain industry. But, chatbots can simplify the inventory management process

AI-powered chatbots can take responsibility for most inventory tracking, which is generally done by a human task force. 

Put another way, chatbots (when integrated properly) can proactively send alerts when something is derailed in the inventory and also help in accurate demand forecasting. This, in turn, can help to prevent any possible disruption in a supply chain operation.

Fleet Management

Fleet is another area revolutionized by chatbots since their arrival in the supply chain industry. 

Chatbots connected with an ELD device are now capable of extracting accurate information about each vehicle in transit, idle vehicles, and under-maintenance vehicles. As a result, they can help to better allocate the available fleet for new freight orders. 

Warehouse Management

A supply chain isn’t only about delivering goods from source to destination, it also involves storage and maintenance. And keeping track of warehouse locations, floor plans, shelf rows, etc. is not as easy as a walk in the park.

Thankfully, chatbots are now capable of making warehouse management related operations a breeze. This includes inventory checks, expected inbound shipments, updating warehouse locations, floor plans, tracking order information, and so on. 

Shipment Tracking

As you might already know, shipment tracking is extremely crucial in customer service. Before chatbots, customers were forced to fill out an online form on the company’s website and wait to receive the information. 

But as technology has evolved, so have the chatbots. Today, a chatbot can eliminate the need to wait for information on their shipments and can instantly know the status of their goods in real-time. 

Answer Customers’ Queries

With chatbots, you can now automate the process of answering the basic queries of customers related to their orders. 

A chatbot can be programmed to provide all details about any particular order in less than a minute and save customers’ time & effort in getting answers to their questions.  

Collect Customer Feedback 

The development of almost every industry somewhat relies on customers’ feedback. And since a supply chain is all about warehousing, distribution, transportation, and delivery, it is of utmost importance to collect feedback from customers & make improvements based on it. 

Again, chatbots can help you in many creative ways to respond to customers’ feedback. For instance, a chatbot can accept feedback from your customers and assist them with possible solutions to resolve their issues and satisfy them. 

Chatbots in Supply Chain: Use Cases

Though chatbots are believed to provide only informational support, the actual use cases of chatbots go way beyond that. 

Following are some chatbots use cases you can consider implementing in your supply chain operations.

1 – Site Navigation

Nowadays, websites have so many pages that customers often get lost while searching for the ones they’re looking for. 

Fortunately, it is now possible to utilize chatbots for site navigation and help lost customers find what they need within your website. Apart from this, chatbots can also be used for different types of navigation such as how-to guides, knowledge centres, etc. 

Just imagine how easier it would be for your customers to ask the chatbot to find content on a specific topic in the knowledge centre rather than browsing through the entire knowledge centre manually. 

In a nutshell, chatbots can help save your customers’ time from scrolling through a massive how-to guide or knowledge centre. 

2 – Procurement Assistance

In addition to all the other roles, chatbots can also play the role of virtual procurement assistants. Chatbots can learn about your customers’ preferences based on previous interactions and offer relevant services, calculate estimates, and much more without the involvement of a human being. 

Plus, chatbots can remember the customers’ previous purchases and ask them if they want to repeat them the next time they reach out. 

3 – Form Filling

Customer reviews, as you already know, can heavily influence other customers’ purchasing decisions. 

According to a survey, 92% of B2B customers are more likely to make a purchase after reading a trustable positive review. This survey report clearly shows that you need positive reviews, and the more you can collect the better. 

Unfortunately, nobody likes to fill out lengthy forms these days, be it a review, complaint, or return form. And this is where chatbots come into play. Chatbots can make the form filling process effortless for customers. 

Let’s suppose that a customer wants to return his last order. Now imagine how easy would it be for your customer to raise a return request if they just had to provide the order ID to your chatbot.

As you can see, chatbots can make the form filling process on your website almost effortless. 

Chatbots in Supply Chain: Future Predictions

The supply chain industry is growing at a rapid pace over the last few years, making it even more difficult to streamline supply chain operations in the long run. 

On the bright side, automation through chatbots has turned out to be vastly effective in streamlining supply chain processes in the industry. 

And since chatbots are linked with artificial intelligence at a certain level, it’s safe to assume that the advancement in artificial intelligence technology will also bring advancement in chatbots. 

So, chatbots are going to get smarter and more human-like over time. In the next 10 years, we can even expect chatbots to execute sentimental analysis to learn about customers’ moods and deliver better results faster.

Concluding Thoughts

Chatbots have emerged as a blessing for many industries, including the supply chain industry. As we’ve just learned, chatbot implementation in various supply chain processes has benefitted both customers and businesses.

They’ve proven themselves to save costs, assist customers 24/7, and automate processes in supply chain operations. With so many benefits & applications, it’s no surprise that more and more businesses are adopting chatbots. 

That said, if you run a logistics business or deal with the supply chain in any way, incorporating a chatbot can be a wise decision. It can bring massive benefits, increase productivity, and streamline operations.



  • Tim Robinson

    Tim Robinson is a Digital Marketing Manager at PACK & SEND, a 25+ years old and respected brand in ecommerce, logistics, and freight delivery solutions. Tim has 20 years of combined experience in sales and marketing. Logistics, D2C, franchising, business planning, and operations management are his core expertise.

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