The Rise of Self-Driving Systems: How Agentic AI is Revolutionizing Supply Chain Operations

The American Nobel Laureate, Milton Friedman, in one of his seminal appearances on PBS Television, held up a pencil and explained:

Wood = sourced from Washington or Oregon

Graphite = comes from mines in Sri Lanka

Rubber = perhaps came from Malaysia

Metal = sourced and mined from an unknown source

And everything else in the pencil comes from places far and wide.

While the eminent economist was making a case for free markets and globalization, he was steelmanning the case for robust supply chain operations, which underpin modern commerce.

However, COVID-19 flagged the tenuous nature of just-in-time supply chains. Endemic container shortages and capricious demand cycles exposed the chinks in modern supply chain operations.

The rise of Agentic AI comes as a welcome reprieve. Automation is now outmoded. Intelligent automation is here.

Attributes of Agentic AI

When it became amply clear that Agentic AI, undergirded by pioneering developments in deep learning and computing power, would be a component of the Fourth Industrial Revolution, we at HostBooks had to think rigorously about the key attributes of agentic platforms.

Accordingly, we zeroed in on three features that define Agentic AI

C.A.C : The Triumvirate of Agentic AI

C = Context – Agents act with operational awareness of their environments. They are trained executors.

A = Autonomous – Within pre-set execution and decision making boundaries, agents independently analyze, validate, and act.

C = Conversation – Agents free the user from interacting in technical templates. They present the users with a natural language interface making the interaction smooth.

HostBooks has developed — and is in the process of expanding — a host of agents to streamline and optimise the business workflows of its clients.

Furthermore, these agents have been christened ‘Zeno’ — named after the Greek philosopher who famously gave answers that his students needed, rather than what they wanted.

HB ‘Zeno’ Agents in Action

An ice cream retailing and manufacturing major, with over 4500 retailers spread across Karnataka, Kerala, Tamil Nadu, and Telangana, had been facing supply chain issues. Multiple distributors, fragmented pricing, outdated warehousing system, and fractured invoicing mechanisms. This led to inventory issues, disgruntled distributors, haphazard GST reconciliations, and fragmented SKU level pricing across regions.

To address the above problem statement, HostBooks Agentic AI ERP was deployed. We must understand this transformation through the prism of C.A.C., to see how HB ‘Zeno’ agents helped the ice cream major address its supply chain issues.

C = Context: HB ‘Zeno Payables’ agents were trained on past invoicing trends, distributor profiles, and compliance records. Hence, they understood their environment.

A = Autonomous: HB ‘Zeno Payables’ agents started three-way auto-validation (PO-GRN-Invoice). This led to swifter invoice approvals, fewer payment disputes, and tighter inventory-cost alignment. Manual matching of invoices was phased out. Further, agents were able to analyse pricing discipline across vendors and provide actionable insights to unlock efficiencies in the supply chain.

C = Conversation: The clincher came with the deployment of the HB ‘Zeno AMA’ agent. The natural language query interface allowed senior management to ask critical

questions like “Which distributor had the highest payment delays?” – without the need to run reports or prepare MIS summaries.

The Quantifiable Efficiencies Enabled by HB ‘Zeno’ Agents

Average distributor invoice processing time came down from 9.5 days to 1.5 days.

CFO query response time shifted from 3-5 days to real-time

SKU pricing inconsistencies — previously showing up to 45-50% variance between neighboring districts — were brought down to 15-20% across 4500 outlets

The Inevitability of Self-Driving Systems

“It is not from the benevolence of the butcher, the brewer, or the baker that we expect our dinner, but from their regard to their own interest.”

These words from Adam Smith, in his seminal treatise The Wealth of Nations (1776), remind us of the importance of aligning incentives in driving free markets.

Another feature of Smith’s work introduced the concept of the “invisible hand,” which self-regulates markets without the intervention of any central planner or agency.

Agentic AI becomes that visible hand – one that drops its cloak of invisibility to bring efficiency, align incentives, and reduce friction, thereby revolutionizing supply chain operations.

HostBooks stands at the vanguard of this transformation – enabling and empowering businesses to be a part of the Agentic AI revolution.