Companies are increasingly using artificial intelligence (AI) to make supply chains, well, more intelligent. From demand planning and procurement to standardising processes, optimising logistics and last-mile delivery, there are abundant use cases for the technology. Yet its implementation across the manufacturing sector remains patchy, despite the obvious benefits it can bring.
AI can transform global supply chains by increasing resilience, efficiency and adaptability against a backdrop of increased disruption and complexity, says Alan Dickson, EY partner in supply chain and operations.
“Traditionally linear supply chains have evolved into vast, interconnected ecosystems, often involving hundreds or even thousands of suppliers,” he says. Managing this complexity becomes more difficult in the context of geopolitical tensions and natural disasters, while new regulations such as the EU’s Carbon Border Adjustment Mechanism also present challenges.
This evolution from traditional linear chains to complex ecosystems demands innovative strategies for resilience and efficiency, and AI’s unique ability to rapidly analyse large volumes of data can deliver invaluable insights into even the most unwieldy logistics networks, Dickson notes.
SEAI can take you step by step on your home energy upgrade journey
Supporting its people in career progression is a key selling point for Bristol Myers Squibb as a great employer
Navigating the future: Ireland’s economic reinvention in a changing world
How legacy companies can thrive in a rapidly changing world
“AI supports real-time risk identification and operational decision making through technologies like control towers – central platforms that give companies end-to-end visibility of their supply chains,” Dickson explains. “These platforms allow for rapid detection of disruptions, mapping of critical suppliers and execution of contingency plans such as sourcing from geographically diversified suppliers to avoid concentrated risk.”
Most useful AI types include predictive analytics, scenario modelling and generative AI for autonomous decision making. Dickson says these tools help businesses simulate outcomes, optimise processes and automate routine decisions, allowing supply-chain planners to focus on strategic, high-value tasks. The technology is also increasingly being used for sustainability tracking and measurement, with adoption as high as 62 per cent, according to an EY study.
AI enables what is being called the “self-sustAInable supply chain”, where machines propose or even execute decisions, with human oversight. “This co-decision model significantly improves responsiveness, reduces downtime, and enhances supply chain resilience, turning complexity into a competitive advantage,” says Dickson.
Mark McKeever, PwC Ireland procurement and supply chain director, says Irish companies are starting to assess various AI use cases.
“There is no doubt that AI will play a critical role in future supply-chain operations – for example, enhancing demand and supply planning via predictive analytics, the ability to react to unexpected events and automating processes such as order taking,” he says.
At the moment, however, AI is not in widespread use across the State’s manufacturing sector. “But what we are starting to see is that a number of multinational companies are starting to use their Irish operation as a ‘lighthouse’ to roll out new AI solutions,” says McKeever. “For these companies, Ireland is seen as an ideal location to trial AI initiatives, given the talent of our workforce, our global perspective and our openness to new technology and innovation.”
From a macroeconomic perspective, McKeever points out that if multinational companies with manufacturing operations in the State become early adopters of new AI technologies, this experience and capability is likely to transfer faster to local Irish manufacturing companies. “This can only enhance the overall competitiveness of the Irish economy,” he says.
Dickson agrees that AI adoption is slowly becoming commonplace in the Irish manufacturing sector but notes significant impetus to quicken the pace.
“To take a step back, customers demand speed in production while executives demand visibility,” he says. “Too many supply chains can’t keep up because they run on disconnected systems, manual processes and unstructured data. Modern solutions leverage AI and intelligent automation to drive greater connectedness in an organisation and with suppliers, adding productivity and resiliency without more complexity.
“In a complex world full of supply-chain risks, you are at risk of falling behind without intelligent automation.”
Companies need to consider their overall AI strategy including governance, compliance and protection, says McKeever.
“We recommend you assess your current end-to-end supply chain to identify and prioritise pain points and areas where AI can add the most value. Organisations also need to close the gap on trust and encourage staff to engage with AI in the workplace.”
