Technology, including AI, offers help with almost all challenges in today's supply chains. But it's important to separate hype from reality, says Amin Sikander, president of Synkrato.

Challenges in today’s supply chains include a scarcity of labor, as well as rising labor costs. Another is a change in customer expectations – what’s often called the “Amazon effect.”

“You have to have warehouses close to your customers, and that’s lead to this explosion of smaller warehouses, which causes its own challenges,” says Sikander.

Another significant challenge is managing supply chain risk and resiliency. “How do you cope with unknown things like COVID? How do you build a more agile supply chain?” asks Sikander.

Emerging technology, such as AI and automation, offer solutions, but it’s critical to identify exactly what business challenge you’re trying to solve and what ROI you expect to get from it, Sikander warns. Because a lot of what supply chain managers are doing with AI right now is “people throwing stuff at the wall and trying to figure out what works,” Sikander says. There’s a lot of potential in AI, but how do you go about separating the AI hype from the AI reality? Sikander says the temptation is to try it for everything, and that’s not a good approach. “It’s generative AI. It’s not generic AI. It’s not one-size-fits-all.” Often, the solution is not in generative AI, which is deploys a large language model, but applied AI.

Another issue is addressing data security while using AI solutions. “How do you make sure your data is your own and you’re not sharing it with the world?” Sikander asks. He also urges companies to make sure the data generated by AI is valid. “AI to an extent is somewhat of a black box, and that’s what is a little scary. “How do you make sure it’s not hallucinating, and is not coming up with bad decisions? I think those are some of the challenges.”