// ARTIFICIAL INTELLIGENCE IN BUSINESS
How AI is driving a more sustainable future for supply chains
By Eric Linxwiler Senior Vice President , TradeBeyond
The retail sector continues to face mounting pressure to meet higher standards of social and environmental responsibility . Consumers have grown increasingly clear about their preferences for sustainability and they ’ re putting their money where their mouths are .
A new study found that more than 80 % of consumers are willing to pay more for sustainably produced goods , which is especially notable at a time when shoppers are tightening their belts amid inflation and higher costs of living . Some consumers are even willing pay a premium of 9.7 % more for products that meet higher environmental standards , the study found .
AI ’ s role in the supply chain
Companies are focusing especially on improving data management systems and incorporating artificial intelligence , with 58 % of organizations reporting they plan to improve ESG data collection with AI . It ’ s easy to see why ― this technology has already proven extremely efficient in its ability to simplify and automate data collection and compliance processes . AI is rapidly becoming a critical component of the drive toward sustainability as tightening global regulations have made it increasingly difficult to maintain compliance and efficiency without sophisticated digital systems .
As AI evolves , it ' s poised to take on an outsized role in supply chain operations . Future applications are on track to extend into autonomous decision-making where AI systems will not only predict but also make real-time adjustments to supply chains without human intervention . Advanced AI is likely to manage most end-to-end supply chain processes , from raw material acquisition through to customer delivery . This deeper integration promises to transform traditional supply chain models into dynamic , predictive networks that can more adeptly respond to global challenges and market fluctuations while ensuring sustainability .
Brands and retailers are understandably eager to leverage AI in their supply chains , but in truth many have not yet created the digital infrastructure to do so . One major obstacle preventing businesses from realizing AI ’ s potential is the lack of organized , centralized , real-time data . To overcome this , companies need to start creating a central repository of supply chain data at the PO , SKU and factory levels .
The foundation for optimizing the benefits of AI for any organization lies in the ability to interconnect thousands of proprietary data points from multiple data sets across your enterprise . That requires aggregating all data from early-stage planning through the creation of product specifications , onto sourcing , costing and logistics , and including detailed information on all suppliers along the supply chain up to the Nth tier . It ’ s only once businesses have established effective data management that they can begin unlocking AI ' s full potential .
Building the data foundation for AI
Digitalizing with a multi-enterprise platform ensures that data is current , accurate and accessible , setting the foundation for leveraging AI . These platforms provide real-time supply chain visibility , allowing businesses to monitor their supply chains continuously , identify potential issues before they escalate and make informed decisions based on accurate , up-to-date information . Establishing this robust digital infrastructure is the key to equipping AI with the data it needs for predictive analytics and automated decision-making .
The right multi-enterprise platform is already deploying AI in innovative ways , and its capabilities are continually expanding . Its recently launched AIpowered chain of custody tools significantly enhances traceability by automating documentary verification and documenting the chain of custody of all materials .
This AI toolset proactively assesses compliance risks and ensures that every link in the supply chain meets your company ’ s standards of sustainability and prepares all chain of custody documents necessary to comply with global ESG regulations . By automatically scanning and vetting all documents against multiple databases of blacklisted entities and identifying gaps or missing documentation before shipping , this AI dramatically simplifies compliance with global ESG laws like the Uyghur Forced Labor Prevention Act .
Find a platform that is utilizing AI to reimagine quality management . For example , AI-powered PO Line Risk Rating functionality optimizes quality inspections by leveraging artificial intelligence to analyze thousands of data points around risk factors such as product type , materials used and country of origin , assigning a percentage risk score to each purchase order line . These capabilities allow businesses to proactively identify and address high-risk PO product lines so they can prioritize quality inspections around high-risk items , reducing inspection costs while increasing product quality .
A multi-enterprise platform serves as an intelligent connector of data from ERP systems , supply chain partners , NGOs and sustainability databases , offering brands and retailers a unified view of their supply chain while tying external data to specific SKUs and purchase orders . The platform ’ s supply chain maps illustrate the relationships between vendors and factories , and even visualize key performance and scorecard metrics such as audit results , certifications and risk levels so compliance managers can see at a glance any vulnerabilities in their supplier base .
Preparing for tomorrow
By centralizing key supplier data , this technology is also instrumental in helping businesses meet their requirements , including their Scope 3 carbon reduction goals , allowing them to collect and assess emissions data , efficiently implement improvement plans and track and measure their progress .
As retail looks toward a more sustainable future , AI and advanced data management systems will be essential for creating responsive , responsible supply chains that can adapt to regulatory changes and market demands . By investing in the right digital systems , retailers can future-proof their operations , ensuring they are not only meeting today ’ s standards but are also prepared for the challenges and opportunities of tomorrow .
Eric Linxwiler is Senior Vice President of TradeBeyond . He has over 30 years of experience in enterprise software and cloud-based platform companies with a specialty in supply chain optimization and workflow management .
www . boatingindustry . com october 2024
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