Can Artificial Intelligence Help Circumvent the Next Global Supply Chain Crisis? 

Feature Story 

Can Artificial Intelligence Help Circumvent the Next Global Supply Chain Crisis? 

- Jayant Borwanker 

Image for representational purposes only. 
Image credits: Shutterstock 

Today’s globalised world has become irrevocably dependent on interconnected and multistakeholder supply chains for goods and services. Yet, the recent pandemic resulted in logistical disruptions of massive proportions across the world. As per the WTO’s World Trade Statistical Review 2021, compared with 2019, the global trade in goods and services declined by 12% in 2020. 

Nonetheless, while the COVID-19 pandemic exposed many vulnerabilities in global supply chains, it is just one example of how these suffer disruptions. Events such as extreme weather, lingering infrastructure and structural bottlenecks, and geopolitical instabilities have all been periodically causing supply chain disruptions worldwide, even before the pandemic. And worryingly, a report by the World Bank suggests that such global supply chain disruptions are expected to persist unless we change the way we do things in this arena.  

Globally, massive food wastage resulting from inefficient supply chains is partly to blame for lingering hunger problems. The shortage of certain components for key production sectors and high freight costs also contribute as bottlenecks to resilient supply chains. These challenges foretell a future wherein stakeholders will need to navigate a climate of persistent unpredictability. Needless to say, this calls for building resilience and agility in global supply chains. 

In this context, artificial intelligence (AI) and blockchain have evinced the potential to revolutionise supply chain management and improve global supply chain efficiency, reduce costs, and enhance overall productivity. “As per a report by the NITI Aayog, AI can add 1 trillion dollars to India’s economy by 2035, and in line with this potential, the Government of India has made sustained efforts to boost investments in AI,” says Prof Ajit Kembhavi, Principal Investigator of the Office of Principal Scientific Adviser (PSA) to the GoI’s Pune Knowledge Cluster, which has Big Data & AI as a focus area under its agenda. 

These projections augur well for the Indian economy, especially against the backdrop of the COVID-19 pandemic. One example of using AI in supply chain management is leveraging a distributed ledger blockchain technology to expedite the delivery of COVID-19 vaccines. “The COVID-19 pandemic has highlighted the importance of having a resilient supply chain. AI-powered solutions can help companies build such resilience by providing visibility into the entire supply chain, enabling faster decision-making, and reducing the risk of supply chain disruptions,” says Sid Chakravarthy, Founder of StaTwig—a Hyderabad-based startup focusing on AI-enabled supply chain solutions to further this objective.  

By integrating various advanced technologies, AI can plug vulnerabilities in global supply chains. This includes: 

• Real-time data analytics to identify bottlenecks and capacity limitations 

• Predictive analytics to reduce lead times, improve inventory management, and minimise excess inventory 

• Improved visibility and transparency by identifying potential risks and enabling quick response to disruptions 

• Supply chain automation to reduce costs, improve efficiency, and minimise human error 

• Enhanced collaboration and communication to improve coordination and quick response 

• Route optimisation by reducing transportation costs, minimising delivery times, and ensuring timely delivery of supplies 

• Quality control and user management   

While these include only a few of the capabilities offered by AI, integrating them into crucial and time-sensitive sectors can ensure the timely and efficient delivery of products and services. AI can be particularly helpful for the healthcare sector in India, considering that it is one of the largest and fastest-growing sectors worldwide. 

Recognising the important role of AI, the Government of India (GoI) has adopted a proactive approach to promote AI in the supply chain sector. This includes the launch of a National AI Strategy in 2018, the establishment of the Digital India Mission for the development of supportive digital infrastructure, and the AI Task Force for identifying opportunities and challenges for AI adoption in India. The GoI is also striving to promote and support startups for AI and supply chain optimisation. Some initiatives in this direction include the creation of the National AI Portal, AI for Agriculture, Logistics Efficiency Enhancement Programme, Startup India, Atal Innovation Mission, and National Logistics Policy. 

Moreover, in the Union Budget 2023–24, the government has reiterated its resolve to ‘Make AI in India and Make AI work for India’. As a part of this promise, the GoI will set up three centres of excellence for AI in top educational institutions. These centres will collaborate with academic institutions and industry players to conduct interdisciplinary research and develop cutting-edge applications and scalable solutions for complex problems. 

Furthermore, the Office of the PSA is also supporting research and development, innovation, and entrepreneurship in AI through its Science and Technology (S&T) clusters. The initiatives being taken for supply chain improvement are primarily aimed at developing AI-based solutions for optimising supply chain management, promoting collaboration and innovation to facilitate the exchange of ideas and best practices, and supporting policy for the adoption of ethical and responsible AI practices. 

With support from the GoI, startups like StaTwig (incubated under the PSA Office’s Science and Technology Cluster, Research and Innovation Circle of Hyderabad), SigTuple, and MFine (both funded under the SIDBI Startup Fund of Funds) are working towards the enhancement of visibility, automation, and smart logistics solutions for the supply chain sector. Moreover, the GoI extends funding for AI-based startups via incubators housed in research institutes (such as IITs and Indian Institute of Science), Public Funded Labs, and the Digital India Programme.  

AI-enabled drones are very useful in distribution for example, Marut Drones is using AI to develop end-to-end drone medical delivery solutions with support from CIE-IITH, a GoI-backed incubator supporting deep-tech startups. Collectively, these funds and initiatives can help increase efficiency, improve visibility, enhance decision-making, augment customer experiences, and enable better risk management with respect to supply chains. 

AI also holds the promise to solve issues related to creating a resource pool of skilled workforce and the safe delivery of goods and services, which are some of the concerns for supply chains after the COVID-19 pandemic. Solutions for automating decisions, tracking and analytics, and integrated safety measures are some ways in which AI can help businesses navigate the rapidly changing supply chain landscape. 

Given the recent pandemic-induced circumstances, the possibility of another global supply chain crisis cannot be denied. By investing in AI-powered solutions today, companies can better prepare for such crises and minimise their impact on their business and customers. Overall, AI as a disruptive technology, and in association with other new age technologies such as machine learning, blockchain, drones, etc., it offers great potential for efficient supply chain management. 

About the author 

Jayant Borwanker is a writer, science communicator, and keen enthusiast of creative pursuits.