Covid-19’s outbreak exposed the vulnerabilities of interconnected global supply chains. National lockdowns led to months-long shutdowns of manufacturing. Supply shortages were widespread due to disruptions in international trade routes. Costs soared. Wild fluctuations in demand rendered inventory planning and forecasting useless.
Matthias Winkenbach is the director of research for the MIT Center for Transportation and Logistics. He says, “It was a black swan that nobody had anticipated, and it threw out traditional measures for resilience and risk.” “Covid-19 revealed that the supply chain industry was vulnerable. This had been going on for years. Just-in time inventory, a global interconnected supply chain and a lean, efficient supply chain all failed.
This is not the only catastrophe to hit supply chains in the past five years. In 2021, a six-day closure of the Suez Canal, a narrow waterway that carries 30% of container traffic worldwide, caused further disruptions, affecting an estimated $9.6 Billion in goods every day. These shocks were a wake-up call. Now, 86% cite resilience as an issue of priority in their supply chains. In the ongoing effort to better prepare for future disruptors, generative artificial intelligence has emerged as a powerful, yet underutilized tool that can surface risk and provide solutions to circumvent threats.
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