As the world is becoming more digital, private companies are now using cutting-edge technologies to streamline their operations and increase public trust. In countries like Pakistan, where the government is in charge of most public services, technological adoption is premature for a number of reasons. This study identified the use of artificial intelligence (AI) in five different management components, such as demand management, procurement management, logistics management, disposal management, and risk management which contribute to enhance overall supply chain management performance in public sector. Research found that bureaucracy is the crucial adoption barrier existed in Pakistan's public distribution systems, with AI being the most popular technology. Data sample collected from 546 respondents in Pakistan using self-structured questionnaire survey and analyzed applying smart equation modeling in SmartPLS software, this study found that AI application in several management components positively enhance the performance of supply chain management. Furthermore, this study identified that bureaucratic barriers in AI implementation have negative moderating role on the relationship between AI application in supply chain management in public sector and overall supply chain management performance. Finally, this study offers several practical and theoretical implications at the end of discussion