AI becoming integral to efforts to secure supply chains

A new report has found that 98 per cent of company executives have implemented artificial intelligence to keep control of their supply chains, and more than a third (34 per cent) are relying on new technologies like AI to help reduce costs.

The latest Trade in Transition poll, commissioned by DP World and led by Economist Impact, suggests that companies across all sectors are using AI to reduce logistics costs, slash inventory levels and improve service levels.

It surveyed 3,500 executives around the world for their views on topics related to global trade and was announced at the World Economic Forum in Davos, Switzerland this week.

They also expect AI and other technologies to bolster supply-chain planning and minimise disruptions, improving supply-chain resiliency at a time of major disruption resulting from geopolitical developments, conflicts around the globe and climate change.

“The tangible benefits of integrating AI are evident, with businesses experiencing a 33.5 per cent reduction in overall trade operation costs and a 32 per cent enhancement in resource and supply chain planning,” according to the report.

Among other technological innovations, a third of respondents said they will focus on advanced automation and robotics for logistics efficiency, 28 per cent will turn to blockchain for enhanced traceability, counterfeit protection and data security, and 21 per cent will embrace artificial intelligence, big-data analytics and predictive analytics for real-time insights and disruption forecasting.

In response to geopolitical events, 36 per cent of respondents prioritised ‘friendshoring’ – shifting production away from geopolitical rivals to friendly powers – while a third (32 per cent) were creating dual supply chains to minimise risks.

Top priorities for the executives included shortening market delivery times, which are great for customers but also streamline supply-chain operations by reducing the need for high inventory levels that tie up working capital.

“The findings in this report reveal a remarkable optimism, despite businesses having to operate in an increasingly uncertain environment,” said DP World Group chairman and chief executive Sultan Ahmed bin Sulayem.

“Governments can maximise the significant economic benefits of trade by providing the predictability that businesses need, while reducing trade friction,” he added. “This entails not only tariff reduction, but also collaborating with the private sector to roll-out technological advancements – most notably in digitalisation, automation and AI – that enable greater efficiency, visibility and adaptability.”