Geopolitical tensions, climate change and the lingering effects of Covid-19 have caused serious supply chain issues. Frequent attacks on vessels have also disrupted shipping routes in the Red Sea, and port congestion and logistics bottlenecks are now all too common in many regions.
Disruptions can quickly cascade through today’s intricately connected global supply chains, leading to soaring operational costs and longer supplier lead times. Quickly responding to these challenges is therefore essential if businesses are to remain competitive and keep customers happy.
Spreadsheets and static dashboards aren’t really up to the task. “With supply chains becoming more complex – lots of different sourcing regions, routes to market and transit times – it’s difficult to use intuition, a spreadsheet or a static dashboard, because there are just too many changes to contend with,” says Anthony Plummer, group chief technology officer at Ligentia, a provider of global supply chain solutions.
Artificial intelligence (AI) and machine-learning tools cut through all this complexity. As well as supporting real-time visibility across every step of the supply chain, these technologies can also help companies to anticipate and address problems in a timely fashion.
“You need continuous monitoring of suppliers, routes and potential disruptions,” says Plummer, adding: “If something happens you should be constantly alerted and prompted [to take action].”
AI can also simulate countless what-if scenarios and assess their impact on the supply chain, helping companies to anticipate disruptions, evaluate potential vulnerabilities and craft the right contingency strategies.
However, even the best AI tools can still be caught out by black-swan events – ones that are rare, difficult to predict and have a large impact.
Because black-swan events do not follow past trends or patterns, AI trained on historical data is unlikely to foresee them. But even when it doesn’t understand what has caused a ship to suddenly change course, for example, it may still be able to predict the impact on the supply chain.
“AI has data on what happens if the Suez Canal is shut, [for example], and transit time increases by two weeks,” says Plummer. “You can model all of that and understand the impact a lot quicker.”
Digital tools can also suggest ways of minimising these disruptions, which could be game-changing for many organisations. “It might say, ‘you’re going to be short of this jumper coming from China, but here’s an alternative sourcing location that could plug the gap’,” Plummer explains.
Other benefits stem from AI-powered demand forecasting, which can reduce the chances of stockouts or surpluses. “When it comes to demand forecasting, intuition and [assuming], ‘the same as last year plus 10%’, doesn’t meet today’s needs,” says Plummer.
“You need to look at different data sources. If you get that demand forecast wrong, it creates horrible ripple effects all the way up the supply chain,” he adds.
While AI can now automate many routine tasks, such as tracking shipments or scheduling deliveries, human expertise remains crucial for complex decision-making.
“Questions like, ‘Where’s my container? When does the vessel arrive?’ – AI can answer those all night long. But for the more complex stuff, you’re going to need experienced people working alongside the AI,” he says.
Plummer believes this will remain true even as the adoption of more advanced tools, such as agentic AI systems, which can carry out tasks autonomously, become more widespread.
“It could mean that we build our own customer-service AI agent, a customs clearance agent, a delivery agent, a finance one – and they’ll actually do things for you rather than just spitting out a reply. They’ll book a delivery, they’ll raise an invoice. If you tie all of that together it could be hugely powerful.”
Despite the potential of these next-gen tools, Plummer believes they will still augment rather than replace most jobs. In other words, it’s AI and people working together that will ultimately enable companies to respond to supply chain disruption in an agile, effective and intelligent manner.
For more information please visit ligentia.com
