The aim of this chapter is to address the use of artificial intelligence in managing GSC, restructuring it, and providing it with enough flexibility to meet the challenges and risks that the current situation—characterized by uncertainty—could threaten including integrity and correct operation. To do this, the authors propose to address issues such as what is a supply chain, what are risks and how risks can affect the management of the supply chain, particularly in the face of the COVID-19 outbreak. Optimizing supply chains and integrating all processes, from suppliers to customers, through warehouses, is a typical target for artificial intelligence (AI). It will be of critical importance to migrate towards ‘Agile' strategies, suitable for the uncertain times we live in, incorporating a timely risk analysis and allowing routine decisions to be taken within the framework of AI.
TopIntroduction
The pandemic consequence of the last 2 years has presented unique challenges for supply chain managers that don’t seem to be falling any time soon. The year 2020 evidenced that we should expect the unexpected. The seemingly unflappable Global Supply Chains (GSC) suffered the consequences of the ‘perfect storm’ that Covid-19 represents, disrupting the logistics operations of companies around the world and mutating consumer-purchasing habits (Sullivan, 2020).
After the impact of Covid-19, GSC is an issue highly topical; an example is the recent article ‘A perfect storm for container shipping’ published by The Economist on 12 Sept., 2021 confirm:
A giant ship wedged across the Suez canal, record-breaking shipping rates, armadas of vessels waiting outside ports, covid-induced shutdowns: the business of container shipping has rarely been as dramatic as it has in 2021.
This ‘perfect storm’ bring us to a question: How to optimize supply chain again after a systemic event. Optimizing supply chains and integrating all processes, from suppliers to customers, through warehouses, is a typical target for Artificial Intelligence (AI). In natural language processing (NLP), a branch of AI, using robots for some warehouse management functions has allowed the optimization of space, and the reduction of inventories and storage costs. Based on a “Lean” or “Kanban” strategy, and a “just in time”1 system. AI is a proper tool for this porpoise.
Contrary to popular belief, the outbreak of the current pandemic was not a surprise. In fact, it had been anticipated by the National Security Strategies (NSS) of the USA, UK or Spain. In the USA NSS, the section devoted to U.S. Borders and Territory. Combat Biothreats and Pandemics says:
Biological incidents have the potential to cause catastrophic loss of life. Biological threats to the U.S. homeland—whether as the result of deliberate attack, accident, or a natural outbreak—are growing and require actions to address them at their source (Trump, 2017).
The 2017 National Security Strategy proposes three priority actions: Detect and contain biothreats at their source; support biomedical innovation and improve emergency response. The absence of an international response to a global problem left the management on the hands of national rulers, unable to solve the problem. As a result, some irrational decisions were taken, influenced by a kind of ‘Black Death syndrome’, taken by rulers lacking global leadership. A side effect of the lack of leadership, has been the risk of global economic collapse2.
Should we leave the management of future crises in the hands of national rulers? It is not our decision, but we could develop tools to enable rational decision-making. Perhaps the time for Artificial Intelligence has come, and one of the first areas of interest is global supply chain management.
TopBackground
The irruption of the covid 19 pandemic, while demonstrating the effectiveness and flexibility of the food supply chain, has revealed serious deficiencies in the supply chains related to health and in the operation of large companies with high dependence on supplies from China, among them:
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Temporary collapse of critical supply chains for society
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Inability to address a health situation, by most governments due to lack of supply
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Irrational and late decisions.
It will be of critical importance to migrate towards ‘Agile’ strategies, suitable for the uncertain times we live in, incorporating a timely risk analysis, and allowing routine decisions to be taken within the framework of AI. Furthermore, this whole optimization procedure will also contribute to develop a more sustainable supply chain by reducing the energy expenditure in the chain as well as potentially decreasing its raw material dependency, making it more efficient.