Can AI Mitigate Black Swan Supply Chain Events?

COVID-19 outbreaks at prominent ports in Southern China have caused the worst backlog since 2019. Much like the supply chain bottleneck caused by the Suez Canal, this congestion could affect the global supply chain.

According to Nishith Rastogi, CEO Locus, the recent flurry of black swan events have exposed the fragility of global supply chains. It is critical to future-proof our supply chains to make them resilient in the face of disruptions by allowing quicker pivots and best plans of actions in times like these.

“With recent back-to-back disruptions in the supply chain such as the Suez Canal Blockage and the current congestion in the Southern China ports, it’s important now more than ever to future-proof the supply chain to help build resilience during times of unexpected challenges,” says Rastogi. “The Southern China congestion has caused a ripple effect across all industries and continents which only emphasizes the dire need for better systems to be put in place.

Currently, adds Rastogi, the shippers or cargo owners have only vehicle/ship level visibility. However, what is really needed is package-level visibility, which will allow shippers and cargo owners to have complete control and clarity over where their package is and can better address the delay of shipments.

“Coming back to the ripple effects and how interconnected the supply chain is, whenever there’s an impact in one leg of the supply chain, brands need to think as to what the impact will be three legs before,” he says. “So, for example, what should be the change in manufacturing levels for a glitch in distribution. This is what the companies don’t know right now. This leads to choke points in the middle and you can’t exactly predict where those chokepoints would be. And this is where technology and AI can help companies do all of this analysis, and more, in real time.”

Rastogi concludes that a simple example of the application of AI is digital twin technology. A digital twin is a virtual simulation of a company’s on-ground supply chain. It helps companies test various ‘what-if’ scenarios to arrive at a well-thought-out strategy to tackle such unforeseen situations:

“So this will take supply chain visibility a step further, and help brands make their supply chains proactive.”

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