How is AI Impacting Supply Chain Visibility?
Global supply chains face a barrage of challenges which AI is looking to address. The game-changing technology is transforming procurement and supply chain management. To explore this cutting-edge intersection of technology and business, we sat down with Kristian O'Meara, SVP of Strategic Initiatives at JAGGAER, a leading provider of AI-powered procurement solutions.
As companies grapple with increased supply chain complexity, regulatory demands and the need for enhanced visibility beyond tier-1 suppliers, JAGGAER has been at the forefront of developing innovative AI-driven tools to address these pressing issues. From real-time risk management to predictive disruption analysis, the company's solutions are helping businesses navigate the turbulent waters of modern supply chains.
JAGGAER's AI technology has evolved to meet current challenges while looking at what its future may be.
The shift in supply chain visibility
Kristian describes supply chain visibility today as a “far broader and data-driven process”, which is encompassing information from Tier 2 and Tier 3 suppliers and a range of indicators that support resilience and compliance as well as standard shipment tracking.
The shocks and aftershocks of supply chain disruptions caused by issues including the Covid-19 pandemic and the Red Sea have revealed the need to have a clear, real-time understanding of the entire supply chain from start to finish, including supplier performance, inventory levels, alternative supply sources and shipment options, as well as vulnerabilities throughout the entire supply network.
In addition to this, ESG compliance and other regulations concerning raw materials such as CBAM or the Uyghur Forced Labor Prevention Act have increased the volume and type of information that businesses need to collect, keep updated and store.
To respond to this increasing volume and depth of information, Kristian outlines how JAGGAER has shifted to address these issues: “We’ve significantly enhanced supply chain visibility by integrating AI-driven risk management, supplier discovery, along market and category intelligence solutions, enabling companies to monitor supply chain risks by continuously analysing supplier performance, compliance and potential disruptions to which they may be exposed,” he explains.
“Introducing automation to these processes via AI frees up staff from lengthy data entry and improves accuracy and timeliness of information which in turn is key to enable effective real-time decision making. By leveraging AI for supplier selection, contract automation and risk monitoring, JAGGAER helps companies avoid costly disruptions and improve efficiency in procurement.”
The increasingly complex regulatory demands for ESG compliance
Accurate monitoring of ESG compliance and Scope 3 emissions tracking across the supply chain is becoming increasingly important, especially for businesses trading in the EU where CSDD and CSRD regulations which specifically highlight Scope 3 emissions tracking have entered into force.
Kristian says, to support businesses in the tracking, updating and analysis of sustainability data from the supply chain both upstream and downstream.
JAGGAER has developed a series of integrations and tools that ensure companies are able to collect comprehensive supply chain data, including ESG performance and carbon footprint transparency. It also tracks total CO₂ emissions from activities and products from assets not owned or controlled by the reporting organisation, but that the organisation indirectly affects in its value chain.
“As regulatory requirements evolve, businesses must adapt their procurement processes to ensure compliance while minimising administrative burdens,” he adds.
“JAGGAER’s AI-driven automation supports this transition by streamlining supplier monitoring, certification tracking and contract management. Automated reminders for necessary documentation reduce manual workload, while self-service portals allow suppliers to upload compliance information efficiently. Additionally, AI-powered contract management ensures that regulatory clauses are incorporated and revised as needed, reducing the risk of human error.”
Developing real-time tracking and risk assessment
JAGGAER is investing in AI-powered real-time risk management by integrating solutions leveraging machine learning to continuously assess supplier risk, monitor compliance and detect potential disruptions before they escalate.
AI-driven supplier, category and market recommendations also help companies proactively adjust sourcing strategies to mitigate risks.
“By incorporating sources from outside the organisation such as from our Supplier Intelligence partners it is possible to integrate information on geopolitical risk, supply depletion and potential inflationary pressures into decision-making, generating rapid alternatives for suppliers and transit routes if a quick pivot is required. “Responsiveness translates into market advantage in volatile times and harnessing AI’s predictive and generative capabilities can ensure decision makers are equipped with keener insight and foresight than competitors.”
Leveraging generative AI to transform procurement workflows
JAGGAER is integrating Gen AI across three key pillars: insights, documentation and collaboration. AI is used to generate real-time procurement insights, automate document creation and summaries and enhance collaboration between stakeholders.
“Gen AI can help improve interactions among procurement teams, internal stakeholders and suppliers, supporting their, for example, management of defect and non-conformities, warehouse and inventory optimisation as well as a range of other functions,” he adds.
“Gen AI also supports negotiation processes by providing intelligent recommendations, chatting with their contracts, contract summaries and helping procurement teams make faster and more informed decisions.”
Emerging technologies enhancing supply chain transparency
Because blockchain is a transaction-based technology there is an ideal fit with procurement.
Specifically, by automating the whole source-to-pay process it can help reduce the need for manual interventions that can lead to fraud and human error while delivering unparalleled traceability.
JAGGAER has seen blockchain start to make its first moves in the procurement world mainly in smart contracts. These contracts are basically strings of code within single blocks on the blockchain which automate actions where specific conditions are met.
In the context of ethical sourcing verification, if a supplier condition is a specific certification, there will be an automatic trigger to verify that this document is within the database and that it is up to date.
“If a specific carbon target is established, this may act as an automation to verify reports and trigger a reminder or even penalties or cessations of contract if the supplier is found in breach.
“Thanks to blockchain, the Chief Procurement Officer can define rules around a transaction so that conditions and obligations are enforced automatically and activating consequences if they are not.”
As today’s global economies are hyper-connected, supply chains span continents and industries are interlinked globally. In the next few years, procurement teams will need to prioritise supplier collaboration and to develop strategic capabilities that leverage AI-driven insights, automation and predictive analytics to boost growth and resilience.
The continual flux of new technological advancements
On the one hand, by sharing data and insights companies and suppliers can improve planning, reduce inefficiencies and minimise risks such as bottlenecks, stockouts and excessive inventory. On the other hand, AI-powered predictive analytics will help procurement teams anticipate disruptions and optimise sourcing strategies, while automation will streamline processes like contract management and compliance tracking. Businesses will need to ensure they select and develop solutions that are easily integrated into their processes and that provide simple user-friendly instruments so that training new procurement officers to the continual flux of new technological advancements does not become a burden.
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