Generative AI in the supply chain

What is Generative AI in the supply chain?

Generative AI in the supply chain refers to the use of large language models (LLMs) in supply chain management. These models can create new content, generate hypothetical scenarios and develop draft responses, scenarios or recommendations, rather than simply analyzing data.

ChatGPT is just one example of a tool using LLMs to generate content that can assist in supply chain management.

Generative AI use cases in the supply chain


Demand planning

Demand planning teams use generative AI to create forecast scenarios without having to build time-consuming Excel models.

Planners can ask AI to "generate a demand forecast assuming 15% market growth and new competitor entry” and receive draft forecast scenarios almost instantly for review.


Documentation

Generative AI can draft comprehensive documentation from brief prompts. Teams just need to review and refine, rather than writing from scratch.

Examples of the kinds of documents it can create include:

  • Standard operating procedures

  • Safety protocols

  • Training materials

  • Requests for proposals (RFPs)


Risk management

Generative AI can assist in risk management by creating response strategies for potential disruptions (e.g., port strikes, supplier bankruptcies or weather events).

AI-generated contingency plans might include mitigation steps, alternative sourcing options or communication templates to streamline the process.

How ChatGPT and LLMs support supply chain operations

Large language models like ChatGPT allow professionals to describe operational challenges or goals as if they were talking to a coworker. In response, tools use supply chain data to offer insights, summaries and recommendations in a conversational format.

For example, LLMs support logistics planning by producing planning options that are reviewed before execution. They can:

  • Create routing scenarios

  • Evaluate tradeoffs between cost and service

  • Provide carrier recommendations

  • Consider constraints like delivery windows and cost targets

In procurement, generative AI accelerates documentation cycles. By using LLMs to create supplier evaluation criteria and draft contract language, cycles can be shortened from weeks to hours.