supply chain management
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Global Firms Leverage AI for Supply Chain Amid Pressures

2 Mins read

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The intricate dance of supply chain management has become even more complex due to geopolitical tensions and the growing demand for companies to uphold environmental and human rights standards within their supply networks. As a result, many of the world’s most prominent companies are turning to artificial intelligence (AI) solutions to navigate these challenges.

Corporations like Unilever, Siemens, and Maersk are harnessing the power of AI to enhance contract negotiations, identify new suppliers, and address issues such as alleged human rights violations and environmental concerns in their supply chains.

1. AI Revolutionizing Supply Chain Management

The utilization of AI in supply chain management isn’t a novel concept; however, the emergence of generative AI technology has introduced a new level of automation and optimization to the process. This technology’s ability to simulate human-like responses and behaviors has opened up avenues for more efficient contract negotiations and other vital functions within the supply chain.

2. The Growing Need for Supplier Oversight

The disruptions brought about by the Covid-19 pandemic and escalating geopolitical tensions have highlighted the importance of robust supply chain oversight. Multinational corporations are increasingly recognizing the need to stay well-informed about their suppliers and customers in order to navigate these challenges effectively.

3. New Regulations Driving Interest

Newly enacted supply chain laws, such as those in Germany, require companies to actively monitor environmental and human rights issues throughout their supply chains. This legal landscape has spurred interest and investment in AI technologies that can help companies comply with these regulations while maintaining the efficiency of their supply chains.

4. The Role of Generative AI

Navneet Kapoor, Chief Technology Officer at Maersk, underscores the transformative impact of generative AI. This technology has enabled the creation of chatbots and software that can generate responses to human queries. This innovation has significantly streamlined communication with suppliers, even amidst disruptions caused by global events.

5. AI Facilitating Contract Negotiations

In a significant development, a San Francisco-based business named Pactum, backed by the world’s second-largest container shipping group, has been employing AI-powered chatbots to negotiate contracts with suppliers for major corporations such as Maersk, Walmart, and Wesco. This AI-driven negotiation process has proven particularly beneficial in times of crisis, ensuring swift and efficient communication with suppliers.

6. Siemens and the Pursuit of Alternatives

Siemens, a prominent German industrial conglomerate, has embraced AI solutions to diversify its supplier base, reducing dependence on Chinese suppliers. The company’s collaboration with Scoutbee, a Berlin-based start-up, has led to the creation of a chatbot capable of identifying alternative suppliers and vulnerabilities in supply chains.

7. AI and Global Mapping

Altana, a New York-based start-up, has harnessed AI to create a comprehensive map connecting 500 million companies worldwide. This map traces products back to their suppliers, even in regions such as Xinjiang. This AI-driven mapping system has proven essential for tracing product origins and ensuring compliance with ethical and regulatory standards.

8. The Potential of AI Adoption

A recent survey of 55 supply chain executives conducted by logistics group Freightos indicates a notable trend. Around 96 percent of professionals in the field are planning to incorporate AI technology into their operations, although only 14 percent have implemented it thus far. This suggests a widespread recognition of AI’s potential to enhance supply chain management.

9. Addressing Job Security Concerns

While AI adoption promises greater efficiency, there are concerns among supply chain professionals about the potential for job cuts. Approximately one-third of survey respondents expressed fears that AI integration could lead to significant job losses within their organizations.

Final Thoughts

As the global business landscape continues to evolve, the use of generative AI in supply chain management emerges as a vital tool for multinational corporations. The combination of geopolitical tensions, regulatory requirements, and the need for efficient supply chain navigation has spurred the adoption of AI technologies. These innovations promise to revolutionize contract negotiations, supplier identification, and ethical compliance within the realm of supply chain management.


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