GenAI, how best to use it for risk management in the supply chain
The application of generative artificial intelligence technologies now represents a real opportunity, capable of significantly improving the resilience and efficiency of operations
2' min read
2' min read
The application of generative artificial intelligence technologies (GenAI) in supply chain risk management (SCRM) today represents a real opportunity, capable of significantly improving the resilience and efficiency of operations. We explore here some use cases that illustrate the potential of GenAI in addressing a range of needs.
Risk identification and assessment
.GenAI can be trained on large volumes of data from different sources, such as press news, regulations, directives, bulletins, supplier information, to detect warning signals about production or financial difficulties, geopolitical tensions or natural disasters that could disrupt the supply chain. For example, Siemens uses GenAI to identify potential risks of disruption in the supply chain by analysing factors such as natural disasters and geopolitical events. These scenarios help the company test the effectiveness of mitigation strategies and develop more robust contingency plans.
Supplier evaluation and monitoring
.With a GenAI solution, suppliers' performance, financial health and regulatory compliance can be continuously monitored, going beyond traditional risk assessment models. Unilever, for example, has implemented a GenAI system to monitor supplier-related financial, news and social media reports, promptly identifying risks such as financial instability and labour disputes. By automating monitoring, managers can focus on more critical risks instead of manually analysing large amounts of data.
Supply Chain Scenario Planning
.GenAI can generate plausible supply chain disruption scenarios based on historical data and industry trends. For example, Maersk uses GenAI to automate the generation of supply chain risk reports, analysing weather forecasts, port operations and shipping schedules to identify potential disruptions. These reports provide visualisations and insights that help make informed decisions and communicate risks effectively.
Automated risk reporting and visualisation
.GenAI can generate concise and informative reports on supply chain risks, customised for different stakeholders. For example, Johnson & Johnson uses GenAI to automate supplier assessment and onboarding, analysing financial statements, quality records and sustainability practices to issue a report on the risk profile of potential suppliers.
