In response to the increasing complexity of global supply chains coupled with geopolitical tensions and mounting pressure to eliminate links to human rights abuses and environmental issues, major companies like Unilever, Siemens, and Maersk are turning to artificial intelligence (AI) to streamline their supply chain operations.
While AI support in supply chain management has been in use for some time, the emergence of generative AI technology is providing new avenues for further automation.
This technology is proving invaluable for negotiating contracts, discovering new suppliers, and identifying connections to critical issues, such as human rights concerns in regions like China’s Xinjiang.
The COVID-19 pandemic and escalating geopolitical tensions have necessitated greater vigilance among multinational corporations to ensure seamless supply chain operations.
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New regulations, such as those in Germany that require companies to monitor environmental and human rights issues within their supply chains, have spurred interest and investments in AI applications.
Navneet Kapoor, the Chief Technology Officer at Maersk, underscored the transformative impact of generative AI.
This technology facilitates the creation of chatbots and other software that can respond effectively to human prompts. Maersk, the world’s second-largest container shipping group, has already collaborated with Pactum, a San Francisco-based startup.
Their ChatGPT-like bot has successfully negotiated contracts with suppliers for Maersk, Walmart, and distribution giant Wesco. Kaspar Korjus, Pactum’s co-founder, emphasized that in times of crises like war, pandemics, or supply chain disruptions, the conventional outreach to suppliers is time-consuming.
Pactum’s AI-powered bot has efficiently managed to negotiate deals worth up to $1 million for several Fortune 500 companies.
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Siemens, the German industrial conglomerate, has also accelerated efforts to diversify its supplier base beyond China. Since 2019, Siemens has leveraged the services of Scoutbee, a Berlin startup that recently launched a chatbot capable of locating alternative suppliers or vulnerabilities in a user’s supply chain.
Evan Smith, CEO of New York-based Altana, highlighted the significance of AI in supply chain mapping. Altana has built a comprehensive map connecting 500 million global companies by analyzing customs declarations, shipping documents, and other data.
This AI-enabled platform empowers customers to trace products back to their origins, identifying potential human rights violations or environmental issues.
A recent survey by logistics group Freightos found that up to 96% of supply chain professionals are considering adopting AI technology.
However, only 14% are currently using it. Despite the promise of efficiency gains, about one-third of survey respondents expressed concerns about AI leading to significant job cuts in their organizations, highlighting the ongoing debate about technology’s impact on job security in various industries.
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