factory workers - AI Supply Chain

How Global Companies Use AI to Prevent Supply Chain Disruptions

Christen Martines | December 5, 2023

Remko Van Hoek and Mary Lacity, HardvardBusinessReview.com, November 21, 2023

Ever since the disruptions caused by the Covid-19 pandemic, boards of directors and CEOs have been  pressuring corporate procurement leaders to de-risk supply chains. Our recent research at Walmart, Tyson Foods, Koch Industries, Maersk, Siemens, and Unilever revealed how these global companies are using advanced AI technologies to plan for and adapt to supply-chain disruptions.

These tools have a variety of applications. They can enhance large companies’ visibility into what’s happening in their supply chains, allow them to respond faster to disruptions, deepen their ties with current suppliers by expanding purchases to new items, enable them to discover and qualify new suppliers ahead of potential crises, and even automate negotiations.

Companies that move quickly to adopt these AI tools stand to gain an advantage. “When there is a supply-chain crisis, the key to being competitive is to be faster at finding alternative suppliers than everyone else because everyone’s looking to do the same thing,” Maggie Brommer, head of procurement for Unilever’s Prestige Products, told us.

Here are details on how the global companies we studied are using AI in procurement.

Finding Alternative Suppliers

Unilever uses an AI application and service provided by German-based start-up Scoutbee to find alternative supply sources on short notice. The software generates a list of potential new suppliers by scraping websites for data on suppliers’ finances, customer ratings, sustainability scorecards, diversity scores, intellectual property information such as patents and design awards, customs documents from U.S. Customs to validate international trading experiences, and real-time alerts from social media and news feeds that can be set by the user to include for example financial reports and major hires or terminations. After the software generates a list of potential suppliers, the process becomes manual. Corporate buyers then instruct Scoutbee’s staff to request more information from specific buyers on the list.

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