PurposeThis systematic literature review (SLR) aims to critically analyze the current academic research on the adoption of artificial intelligence (AI) in supply chain management (SCM) and develop a theoretical framework and future research agenda.Design/methodology/approachThrough a comprehensive review of 68 relevant papers, this study synthesizes the findings to identify key themes based on extended technology-organization-environment (TOE) theory.FindingsThis study analyzes AI integration in SCM based on the TOE framework, identifying drivers (technological, organizational, environmental and human), barriers (technical, organizational, economic and human) and outcomes (operational, environmental, social and economic) of AI adoption. It emphasizes AI's potential in improving SCM practices like resilience, process improvement and sustainable operations, contributing to better decision-making, efficiency and sustainable practices. The study also provided a novel framework that offers insights for strategic AI integration in SCM, aiding policymakers and managers in understanding and leveraging AI's multifaceted impact.Originality/valueThe originality of the study lies in the development of a theoretical framework that not only elucidates the drivers and barriers of AI in SCM but also maps the operational, financial, environmental and social outcomes of AI-enabled practices. This framework serves as a novel tool for policymakers and managers, offering specific, actionable insights for the strategic integration of AI in supply chains (SCs). Furthermore, the study's value is underscored by its potential to guide policy formulation and managerial decision-making, with a focus on optimizing SC efficiency, sustainability and resilience through AI adoption.