What’s Next for AI and Automation in Supply Chain Risk Management?
I think we can expect AI and machine learning (ML) technologies to have a positive impact on key issues for supply chain organizations. Some of the most important effects survey respondents anticipate from AI and ML include:
- Increased visibility across the entire supply chain (76%)
- Reduced labor costs through increased automation and efficiency (70%)
- Increased accuracy in the demand planning/S&OP process (64%)
- Improved purchasing efficiency (62%)
As I mentioned earlier, AI and automation are already being integrated into supply chains in the form of predictive analytics to improve decision-making and mitigate risk. I also expect that with the rapid development of generative AI, automated technologies will be increasingly adopted to analyze the large amounts of data collected by supply chain organizations over time.
This is part of the manufacturing industry’s broader shift towards Industry 5.0, which will digitize routine and computationally intensive tasks. It is important to note that Industry 5.0 places people at the center of what we do; it is an extension of our skills to optimize our workflow. Automation is by no means a replacement, but rather a partnership with skilled workers.
To stay ahead of the disruptions of today and tomorrow, supply chain organizations must establish effective data governance strategies to ensure that AI models receive the most accurate data feeds. as structured as possible. This will improve the consistency, efficiency and predictive values of AI-enabled risk management processes across teams and locations.
How can sustainability and resilience go hand in hand?
Sustainability and resilience are closely linked in supply chain management and are becoming increasingly essential for businesses operating in today’s complex global landscape.
The constant focus on improving the customer experience has sometimes overshadowed sustainability considerations in the past. However, this paradigm is changing as businesses evolve to meet regulations to reduce carbon emissions.
The global supply chain faces critical challenges posed by an ever-increasing number of regulations aimed at reducing greenhouse gas emissions. The European Union is implementing strict sustainability requirements across all logistics modes, from aviation to shipping.
Logistics providers are facing increased operational costs caused by the ReFuelEU law which mandates the sustainable use of aviation fuel (SAF) and the inclusion of maritime emissions in the Emissions Trading Scheme (ETS). ). Generally speaking, logistics providers will have to pass these costs on to their customers. We anticipate that the United States will face similar ESG regulations, making sustainability of products and supply chains a priority.
Although still in their early stages, I believe sustainability measures will gradually be integrated into business models to reduce waste, energy consumption and emissions throughout supply chains . Nearly eight in ten (79%) respondents said processes to reduce the supply chain carbon footprint are already in place in their organization.
I predict that this number will continue to rise as more countries implement their own laws regulating carbon emissions, water use, and corporate waste production.
Investing in sustainable practices not only helps businesses mitigate their environmental impact, but also improves their resilience in the face of regulatory change and disruption. Strategic partnerships with specialist providers can further support organizations in these future directions.
By collaborating with supply chain partners, organizations can optimize their processes, develop more resilient supply chains, and better prepare for market disruptions while contributing to a more sustainable future.
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