The Growing Anxiety Around AI Expansion
AI in supply chains is continuing to cause disruptions. Although I love technology, I feel like the “AI” stuff is almost overwhelming at this point. The headlines scream about everyone losing their jobs and a future where all work is done by agents and robots, and we will be able to live to two hundred years old.
The High Cost of AI: Can the Investment Pay Off?
I think I have started to see some signs, though, that second thoughts are creeping in about AI. Some of the numbers are just crazy: fifty billion dollars for something is a staggering investment to pay off; can those numbers be recouped? Add to that, without new efficiencies in other areas like the water supply, it’s estimated that we may be short about a billion gallons of water PER DAY by 2030. By comparison, this is about what New York City uses per day in water. Regardless of this, the “prize” of reaching an AI state that replicates human cognitive abilities seems to be so great that most other things fall by the wayside.
Supply Chains Under Pressure: A New Kind of Bottleneck
Specific to our industry and as pointed out in this article from SupplyChainBrian, we may face more issues than others. A supply chain is a network of independent partners that are adjacent to each other. Even as AI is implemented in certain areas, instead of causing any constraints to disappear, it appears that more pressure is being put on other areas of the chain, resulting in uncertainty.
When Optimization Creates Instability
There are several examples in the article, but one that popped out is transportation routing. A quote from the article here: “Or take AI-enabled dynamic routing in transportation. An algorithm that continuously reoptimizes truck assignments based on real-time traffic, load consolidation opportunities, and delivery windows can reduce cost per mile. But those same dynamic assignments can create instability for drivers, warehouse teams, and receiving docks that depend on predictable arrival windows. The constraint migrates from route efficiency to schedule coordination.”
Preparing for Continued Disruption in the AI Era
So, even though AI is more widely available and its adoption continues to grow, the network coordination of supply chains is still in its infancy. We should be prepared for more disruption as AI gets implemented at the function level in companies, as these implementations are actually causing issues to arise elsewhere.
