Executive Order Shines Spotlight On The Promise Of AI In Supply Chains
Recently, the White House announced its landmark executive order on emerging AI technologies, with legislation promising to guide the safety and security of the U.S. government and its workers. The executive order focused on AI policies was wide-ranging in scope, spotlighting government guidance for private industry, AI security, workers’ support, AI innovation and competition, and American leadership in the field.
The White House also announced the formation of the United States AI Safety Institute (US AISI) inside NIST. The US AISI will aim to establish guidelines, tools, and best practices to identify and mitigate AI risk.
This comprehensive policy directive from the White House kickstarts how the government approaches AI usage in a rapidly shifting world. It also aligns with how we approach AI in business, within supply chain management, manufacturing, logistics, and inventory control. The executive order seeks to ensure the safety and security of AI software and networks on a wide-ranging level.
But will these guidelines work for industrial distribution and manufacturing inventory? There may be opportunities to lessen risks of AI systems used in logistics, such as biases in routing algorithms or cybersecurity vulnerabilities in inventory tracking. Will all companies in these areas have to submit their software tools and data codes for government oversight?
Let’s drill into this executive order and how the latest AI technology may impact the supply chain, manufacturing industry, and materials inventory space.
AI Usage in Supply Chains
Many of you in our industry know that AI already has various applications across the supply chain. Automating digital processes is an operational necessity today, and AI is a powerful mechanism behind that. AI-powered chatbots are already serving customers and tracking orders. AI co-pilots will take on more complex supply chain tasks as the technology develops.
The benefits of AI in supply chains for planning, forecasting, procurement, warehouses, and transportation are growing quickly, with more opportunities ahead. Today, AI can speed up supply chain decision-making by providing real-time insights, predictive analytics, and scenario modeling. This can help companies have a clear look at their demand forecasting, inventory management, and transportation planning. All of this can result in economic cost savings and operational efficiencies.
The executive order recognizes the pivotal role AI and machine learning plays in enhancing the efficiency and resilience of supply chains. As we saw during the COVID era, AI-driven supply chain applications can tackle issues in supply chain bottlenecks with far better results than previous methods. Hopefully, these experiences from 2020-2021 will push the White House to allow more AI-driven applications tailored for the supply chain to drive innovation and competitive advantages in similar future scenarios.
Logistics and Inventory Management
Another hopeful point in the executive order is improving logistics and inventory management. AI can help optimize directional routes, lower transportation costs, and minimize delivery times. Those benefits are impressive, leading to a greener and more sustainable world with less dependence on far-flung countries that may be unpredictable. Plus, AI can enhance inventory control with real-time tracking and demand forecasting.
There are many examples abound in our industry now, with more likely in the years ahead. For example, machine learning algorithms analyze past data and current conditions to advise the best times and places to reorder, transfer, or store items. Computer vision AI tracks inventory on shelves and knows when stocks are low. Sensors enabled with AI monitor equipment and infrastructure in warehouses, trucks and ships, predicting maintenance needs. AI technology promotes lean, efficient operations like no other.
By automating the work with an AI-powered MRO platform, AI can improve demand signaling by detecting purchasing and consumption data patterns from the small to the large. AI optimization in storeroom management and inventory tracking shows the entire supply network, allowing manufacturers to access accurate MRO analytics with a few clicks.
With logistics and inventory being critical components of the supply chain, the executive order’s directives set the stage for companies to adopt AI-driven solutions to transform how they manage these vital functions. This approach will increase supply chain resilience while reducing operational costs and any potential environmental impact.
Hiring and Training
The White House’s recognition of the need for a skilled AI workforce is an important aspect of the executive order. The order seeks to boost visa opportunities for those AI experts or technicians in other emerging technologies. The executive order also wants to update the occupations for these roles, which could quicken the process of bringing in smart technology talent.
Let’s be real here – supply chain companies can use the new tech-minded talent skilled in AI. Companies can execute AI supply chain strategies more effectively with a more tech-focused workforce. There is also a role for corporate training in AI for companies open to retraining and upskilling programs needed to build AI capabilities.
In addition, the executive order includes aspirations for federal workers, including guidance that would assess AI governance and risk management in federal agencies. The process would certainly increase transparency, protect federal workers, and manage risks from government uses of AI.
Next Steps for AI in Supply Chains
There is a lot to unpack in the White House executive order on AI. And, with such projects of this magnitude, connected parties in academia, government, and private industry will need to collaborate in the coming months to come to mutual understanding.
Realizing the full promise of AI in supply chains will require focus in several areas:
- Build open data standards and protocols so AI systems can communicate and learn from each other. This will amplify the power of the technology.
- Ensure data privacy and security – AI systems must be taught to protect sensitive information while delivering optimal performance.
- Build trust in purpose-built systems – Encourage established models that are designed to augment, not replace, existing workforce.
- Develop AI tools and processes that people can understand. AI must be transparent about its reasoning and recommendations. This is essential for human trust.
- Providing extensive training for new employees and reskilling programs for existing employees eager to learn AI tools effectively.
By advancing together in these areas, supply chain companies and professionals can shape a future where AI unlocks new levels of efficiency, insights, and customer value. Additionally, President Biden convened the inaugural White House Council on Supply Chain Resilience earlier this week, so it will be interesting to provide thoughts on how AI policies can be used to drive the nearly 30 new actions the council has agreed upon to strengthen the nation’s supply chains. The White House AI initiative indicates the first steps of many along this journey – now, we must work to fulfill AI’s promise and keep American supply chains a top priority.
Paul Noble,
Founder & CEO of Verusen