World’s Biggest Companies Turn to AI for Supply Chain Management Amid Geopolitical Tensions
Big international corporations like Unilever, Siemens, and Maersk are increasingly relying on artificial intelligence (AI) to navigate complex supply chains in the face of geopolitical tensions and mounting pressure to address environmental and human rights concerns. These companies are using AI technology to automate processes such as contract negotiations, supplier identification, and monitoring of supply chain issues like alleged human rights abuses in China’s Xinjiang region.
While AI has been used in supply chain management for years, the advent of generative AI technology has opened up even more opportunities for automation. The Covid-19 pandemic and rising geopolitical tensions have necessitated better oversight of suppliers and customers, prompting more multinational companies to explore AI solutions. Legal developments in countries like Germany, which now require businesses to monitor environmental and human rights issues in their supply chains, have also driven interest and investment in AI for supply chain management.
Maersk, one of the world’s largest container shipping groups, has embraced generative AI technology to negotiate contracts through a chatbot developed by San Francisco-based start-up Pactum. This chatbot, similar to OpenAI’s ChatGPT model, has successfully negotiated deals worth up to $1 million on behalf of several Fortune 500 companies, including Maersk, Walmart, and distribution group Wesco.
Siemens, a German industrial conglomerate, has also accelerated its efforts to reduce dependence on Chinese suppliers. Since 2019, Siemens has been using the services of Berlin-based start-up Scoutbee, which recently launched a chatbot capable of identifying alternative suppliers or vulnerabilities in a user’s supply chain. The geopolitical aspect is a key concern for Siemens, according to Michael Klinger, a supply chain executive at the company.
Unilever, the maker of popular brands like Marmite and Magnums, has also benefited from AI-powered supply chain management. When China went into lockdown during the pandemic, Unilever leveraged Scoutbee’s technology to identify new suppliers and maintain its operations.
Other startups, like Altana based in New York, provide AI-enabled platforms that allow customers to trace products back to suppliers or track if their products are being used in specific applications, such as Russian weapons systems. Altana’s CEO, Evan Smith, emphasizes the sheer volume of data involved in these supply chain investigations, highlighting the need for AI to process billions of data points across different languages.
A survey conducted by logistics group Freightos found that up to 96 percent of supply chain professionals plan to adopt AI technology, although only 14 percent are currently using it. However, nearly one-third of the respondents expressed concerns about the potential job cuts resulting from AI adoption, underscoring the apprehension around the impact of technology on job security in the industry.
As companies continue to grapple with global disruptions and increasingly stringent supply chain regulations, AI is proving to be a valuable tool for maintaining transparency, sustainability, and efficiency. While concerns about the impact on employment persist, AI-driven supply chain management has the potential to transform processes, enhance decision-making, and mitigate risk for businesses operating on a global scale.
