The rapid pace of global trade and logistics necessitates integrating advanced technologies into supply chain management. This urgency is particularly relevant for developing countries, including Uzbekistan.

Effective supply chain management ensures economic growth and stability. In this context, the revolutionary power of artificial intelligence is clearly shown by the latest reports of international organizations.

AI’s Transformative Impact

According to the United Nations Conference on Trade and Development (UNCTAD) Technology and Innovation Report 2023, AI is becoming the backbone of the digital economy, especially for developing countries. There are several reasons for this, but the main ones are:

AI improves decision-making by processing large amounts of data and providing actionable recommendations. This is of great importance in demand forecasting, effective inventory management, and control of the delivery process.

AI-driven supply chains can enable businesses and nations to be more resilient and flexible against modern threats like global pandemics and geopolitical conflicts. For example, Georgetown Magazine noted that AI’s ability to predict and mitigate risks is critical to ensuring operational stability in the face of unexpected global economic or political challenges.

According to traditional literature, preventing supply chain risks consists of the following steps: identifying risks, analyzing them, and developing appropriate strategies. Artificial intelligence, in turn, significantly increases these capabilities and can make the process of risk mitigation in the network more effective.

AI tools are beneficial in detecting abnormal changes in supply with the required and continuous data set. They have high analytical capabilities in evaluating and comparing the rationality of different reactive strategies through simulations. These simulations help assess the system impact and recovery time of each strategy and can also help determine product, price, and supplier changes.

AI’s Economic Benefits in the Supply Chain

AI can be distinguished from recent innovations such as 5G, industrial robotization, and blockchain. In addition, many think tanks and analytical companies have studied this system in depth, emphasizing its positive aspects. We can also rely on open data to say with confidence that the effects of artificial intelligence on government-wide optimization of supply chain operations will ultimately increase economic growth.

In particular, based on the analysis of the McKinsey Global Institute, the European Parliament estimates that AI will contribute 13 trillion euros to the global economy by 2030. However, it is worth noting that to better assess the impact of AI on the state economy, it is necessary to analyze its results at the enterprise level first because the economic growth of each state directly depends on the effectiveness of entrepreneurship. Another source of McKinsey can be cited at this point. According to McKinsey’s analysis, AI can reduce the logistics costs of enterprises and improve inventory management. In particular, according to the study results, enterprises that have already implemented AI in their operations and market conditions can reduce logistics costs by up to 15 percent, improve inventory management efficiency by 35 percent, and increase service levels by 65 percent. In a survey of more than 150 business leaders, 70 percent said that despite the initial costs of implementing AI tools, the solution has a high ROI.

Such positive industrial results show the ability of AI and supply chain to harmonize well, and a set of micro-indicators like this is bound to give the country a big industrial boost.

The Role of SCM and AI in Uzbekistan’s Economic Development

Satisfactory supply chain management is essential for economic development in Uzbekistan, and artificial intelligence is crucial in this sector. Compliant supply chains reduce costs and increase productivity at the enterprise and state levels, allowing the country to be competitive in global markets.

In addition, the systematic movement of products across state borders and internal territories is essential in increasing market attractiveness. This process increases consumer interest in products, which is vital to boosting trade indicators, demonstrating economic potential, attracting foreign investments, and creating new jobs. Robust supply chains can also provide resilience and development to disruptions caused by natural disasters, political instability, or economic change.

At the same time, Uzbekistan is one of the rare landlocked countries in the world, and one of the main directions of its economic strategy is the export of products and raw materials. In particular, it is natural that Uzbekistan’s geographical limitations make it challenging to enter global markets and cause additional costs. Therefore, the issue of Uzbekistan overcoming geographical challenges, strengthening the economy, and ensuring long-term stability through the joint application of effective supply chain management and artificial intelligence technologies is of great importance.

In short, AI is a technological upgrade and a strategic necessity for developing countries, including Uzbekistan. AI’s ability to analyze large data sets, predict market trends, and automate processes can make supply chains more efficient and coordinated.

By introducing AI, we can make Uzbekistan’s supply chain one of the cornerstones of the country’s strategic and economic development, while making it cost-effective, durable and flexible.

Sokhibkhon Salikhov, 

MBA in Supply Chain Management, University of Wisconsin–Madison,

Supply Chain Expert and Consultant