JAGGAER: How to Leverage AI for Supply Chain Visibility

Supply chain visibility has dropped by 26% over the past couple of years, leaving less than a third (30%) of companies able to see beyond their tier 1 suppliers, according to McKinsey.

Georg Roesch, VP of Direct Procurement Strategy at JAGGAER, says that, while many companies discuss using AI to improve visibility, they often overlook its true potential: gaining insights beyond their tier 1 suppliers. 

How crucial has supply chain visibility become in recent years?

Supply chain visibility has shifted from being a logistical necessity to a strategic imperative. With increasing global disruptions and uncertainties – such as geopolitical tensions, and climate change – companies can no longer afford to operate in the dark about their supply chain dynamics. Visibility today goes beyond just tracking shipments. It’s about having a clear, real-time understanding of your 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. 

This visibility is a strategic imperative because it directly influences a company’s ability to successfully navigate today’s market and avoid the financial and reputational consequences of shortages and other supply chain issues. Real-time visibility empowers businesses to act decisively, mitigate risks and seize emerging opportunities faster than competitors. Additionally, visibility is critical for meeting ESG goals, as stakeholders increasingly demand transparency around sustainable and ethical sourcing practices.

Supply chains are becoming more global and complex. Companies that prioritise getting real-time data and visibility are not only more agile but also more resilient and better positioned to build trust with stakeholders and gain a competitive edge.  

To what extent has the rise of AI changed companies' ability to obtain visibility?

AI has revolutionised how companies gain visibility. In short, AI enables companies to understand why something is happening and, more importantly, what to do about it. 

AI now enables companies to easily make sense of vast amounts of supplier data including historical spending data, market trends, supplier performance and more. This increases visibility by creating a complete picture of suppliers and their performance. Predictive AI can analyse past performance and alert the procurement team if a supplier is likely to be late. Prescriptive analytics can then give procurement a recommendation on an alternative supplier that meets the company’s goals, standards and timelines. 

AI can also help companies predict inventory shortages, shipment delays or demand fluctuations and offer proactive solutions to prevent operational bottlenecks. AI also extends visibility beyond immediate suppliers, offering insights into deeper tiers of the supply chain, which is essential for informed, strategic decisions, managing risks and achieving sustainability objectives. 

Why is it so important for companies to be able to see beyond tier 1 suppliers?

Tier 1 suppliers are just the tip of the iceberg when it comes to supply chain visibility.  Many of the most significant risks and disruptions – such as natural disasters, shipping disruptions, regulatory issues or unethical practices – cause issues or lurk deeper within the supply chain among tier 2 or tier 3 suppliers. Without visibility into these levels, companies risk being blindsided by disruptions that ripple across the supply chain, causing delays, cost increases and reputational damage. These setbacks don’t just impact operational efficiency – they also hinder a company’s ability to compete. Regardless of how much visibility you have with your tier 1 suppliers, you are still vulnerable if you don’t have visibility into tier 2 and 3. 

This deeper visibility is crucial for advancing sustainability. Many companies now have ESG goals and suppliers deep within the supply chain often play a significant role in meeting these goals. By gaining visibility into supplier performance and across the entire supply chain, companies can proactively address these risks by ensuring they’re not inadvertently contributing to issues like human rights violations, unethical practices or environmental harm. 

What can leaders be doing to harness the true potential of AI when it comes to supply chain visibility?

First, make sure your data is in order. AI is only as powerful as the data it analyses, so ensuring your data is clean and well-organised is paramount in order to get the most out of AI.

Second, find a solution that integrates AI across the procurement lifecycle and centralises your data into one platform. This will give you a global view that empowers better decision-making. 

Organisations also need to focus on predictive and perspective capabilities. Prioritise tools that not only spot trends, risks and inefficiencies but also provide actionable insights to mitigate them. For example, AI can automate demand forecasting or flag inventory management and supplier performance issues early, allowing supply chain teams to focus on higher-level strategic decisions and take proactive steps. 

Equally important is establishing a culture where AI-driven insights inform decisions at every level, whether it’s adjusting sourcing strategies, improving supplier relationships or identifying opportunities for cost savings. The key to AI’s potential is not just implementing the technology, but ensuring it is fully embedded in everyday processes, driving agility, innovation, better decisions and efficiency throughout the supply chain.

How can AI be used to facilitate stronger relationships with suppliers?

One of the biggest benefits of AI is that the strategic insights it delivers enable better supplier collaboration. Buyers and suppliers can more easily work together to resolve issues before they turn into bigger problems that could threaten the success of the relationship and of both parties’ businesses. 

AI gives a more accurate, up-to-date view of inventory levels, demand forecasts and potential disruptions, enabling buyers and suppliers to plan more effectively and minimise last-minute requests or urgent orders that strain relationships. Predictive analytics can flag potential delays early, allowing both parties enough time to adjust and work together on mitigation strategies.

AI also improves supplier performance evaluations, offering more granular insights into delivery times, quality and compliance metrics. This data can be used for constructive feedback and continuous improvement. Over time, the continuous flow of information builds a stronger, more collaborative partnership, where both parties are aligned and invested in the success of the relationship. Additionally, by automating routine tasks and reducing inefficiencies, AI frees up resources on both sides for deeper, strategic collaboration, which also strengthens relationships.

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