Supply chain security became a worldwide headline-grabbing event last month during a rash of exploding pagers and beepers in Lebanon, but the issue has been increasingly roiling the industry for several years.
The fragility of a globally interconnected system with so many points in-between was exploited by an Israeli military operation that led to 42 explosion-related deaths, prompting cries of pricey technology such as smart containers, real-time monitoring systems, and automated checkpoints to shore up gaps. Two more technologies have emerged as alternatives — blockchain and cybersecurity.
More importantly, the violence in Lebanon sparked a debate over how AI might ease or exacerbate headaches for suppliers and third-party logistics providers (3PLs). A new study on logistics from Penn State University, in collaboration with NTT DATA and Penske Logistics, believes the answer may come down to two letters: AI.
“While users and providers of 3PL (third-party logistics providers) services continue to report successful relationships, they find themselves having to deal with an increasingly wide range of challenges,” Dr. C. John Langley, professor of supply chain and information systems at Penn State University, said in a statement. “While examples include economic concerns, geopolitical unrest, and changing markets for supply chain services, they also are taking advantage of change management processes to benefit from new and improved capabilities such as AI and direct-to-customer proficiencies.”
To that end, shippers and 3PLs believe AI can be pivotal in automating data analysis, identifying patterns, solving problems and automating repetitive tasks.
Shippers (61%) and 3PLs (73%) agree supply chain change management is vital, according to the annual survey. Among respondents, 58% of shippers and 76% of 3PLs are deploying a change management framework.
Specifically, a third of shippers are seeking implementations related to supply planning and demand forecasting, while 19% of 3PLs reported planning implementation in the area. More than a quarter of shippers (27%) expressed an interest in transportation and route optimization technologies, while 22% of 3PLs noted they are planning to install these capabilities.
The research offers a deep dive into the state of the 3PL market, and contemporary issues like nearshoring and trends in commercial real estate and supply chain labor.
“We need intense security over our supply chain. It is of national security concern,” Lucas Tesler, a partner at Silicon Foundry, said in an interview, commenting on the state of the worldwide network of supply parts. “AI will help in analyzing millions of data points.”
Since Covid, there has been more emphasis on supply chain tracing, he said, leading to some intriguing technology. One example, he said, is Altana, which has developed the most comprehensive model of the global flow of goods ever developed.
“[The model] provides insight on the flow of goods and advanced data analysis” on factors ranging from weather to geopolitical events and news, Tesler said. “It is really granular stuff on operations for vendors across every stage of the supply chain… down to second- and third-tier suppliers.”
At its very core, the survey “reinforces what we see in the market regarding businesses trying to manage through the volatility of day-to-day operations, relying on new capabilities like AI, and deeper partner relationships,” said Shanton Wilcox, senior vice president of supply chain consulting at NTT DATA. “All of these efforts and investments rely on change management to increase the likelihood of success.”
