Tsinghua Southeast Asia Center Hosts A Webinar “Transforming Supply Chains With AI” Bali, Indonesia – 12 June 2024 – Tsinghua Southeast Asia Center (TSEA) hosted an online webinar titled “Transforming Supply Chains with AI” collaborating with the professor and Associate Dean of the Tsinghua Shenzhen International Graduate School, Professor Victor Chan. It was attended by over 130 professionals and entrepreneurs from various industries ranging from education, energy, fintech, agriculture, maritime, FMCG and more. 

Prof. Chan began his presentation by discussing the evolution of supply chains and the integration of AI. He highlighted key historical milestones, starting from the development of early computing machines to the emergence of big data and AI technologies. Interestingly, professor Chan notes that there was a long delay between these first concept appearances until its concrete development that can be conveniently used by the mass public, resulting also in the gap between technological innovation and supply chain evolution. “Whoever gets in front, will be the winner,” he noted. 

The fundamental concern of AI that Prof. Chan addressed is the level of readiness of individuals and companies to utilize AI correctly and efficiently. He shared insights from various studies on AI readiness across industries, showing the energy, retail, and nonprofit sectors are the most prepared for AI integration, while banking, utility, and healthcare lag behind. “The reason why energy and banking are the most ready to use AI is because they already operate in regulation-heavy environments, so as long as the AI operates within these boundaries, they are confident to use it.” He further added that the skepticism and mistrust towards AI is one of the main obstacles of its inefficient use particularly in companies, with 95% employees are optimistic about AI but less than 48% say organizations or executives have guidelines/policies for responsible AI.

In relation to Supply Chain Management, Prof. Chan presented a report from Boston Consulting Group showing that 2023 sees a massive acceleration in AI funding with demand forecasting as the highest digital investment priority for supply chains, “It is just a small part of the whole supply chain really, when there are real time products, tracking, capacity plannings, warehouse operations and more. People think they are using AI but they are not using it in the right place or know how to use it efficiently. So, the main finding of this report shows that the issue is not that people do not use AI, but they don’t quite know how and where to use AI in their whole supply chain.” 

He also shared several real-life case studies demonstrating effective AI usage. In one case, Fresh Food Supply Chains utilized AI models to predict demand for over 3,000 SKUs, enhancing efficiency and reducing daily costs by 3.5%. Additionally, AI can predict carbon emissions from international shipping activities. Systems have been developed for users to calculate carbon emissions from their transportation and offer ocean match solutions, enabling them to trade carbon emission offsets for their customers. 

Prof. Chan closed the webinar with a conclusion that companies should improve their readiness level in understanding and using AI. “You think you are ready, but you are not. There are so many processes in supply chains, each as complicated as the other. AI is good, but you have to know when to use and which AI model to use and how to interpret the results of the AI.” He further added the importance of not just throwing AI to solve problems, but to properly pinpoint your strategic objectives then figure out the right model of AI that would be best paired to achieve it. He encouraged enthusiastic participants to equip themselves with the right skills to seize maximum benefits from AI by joining the Smart Supply Chain Management Program under Tsinghua Southeast Asia Center. The program is led by Prof. Chan, along with Professor Ed Crawley from MIT and Professor Togar M. Simatupang from the Bandung Institute of Technology

This webinar is part of preliminary programs on the road to the 4-week hybrid training program Smart Supply Chain Management which will be held in August 2024. Designed for middle and senior managers, the program aims to provide comprehensive knowledge on integrating AI and smart technologies into supply chain management. Find out more sscm.tsea.asia.