Emerging from an era of relative stability, the current landscape of international trade and supply chain management is characterised by volatility and unpredictability, particularly influenced by tariffs and trade wars. A recent webinar hosted by Supply Chain Companions spotlighted how generative AI (GenAI) tools like DeepSeek can empower businesses to rapidly analyse myriad scenarios, enabling them to make informed strategic decisions amidst this uncertainty.
Carlos Cordon and Marcel van Rossum, leading voices in this field, stressed the urgency of adapting to rapid changes in the business environment. Cordon introduced the term “DeepSeek moment,” a nod to the breakthrough capabilities offered by a Chinese start-up that allows even medium-sized enterprises to leverage generative AI effectively. Historically, major tech companies such as OpenAI and Google spearheaded this space, implying that advanced AI analytics were restricted to those with vast resources. However, as Cordon highlighted, “Anyone can use DeepSeek,” fundamentally reshaping perceptions of accessibility in AI technology.
Van Rossum echoed this sentiment, emphasising the need for speed in decision-making due to the unpredictable nature of circumstances like import tariffs. He recalled his tenure as a supply chain director at Johnson & Johnson, where sudden shifts forced dramatic operational changes. His experience speaks to a broader concern—businesses are facing multifaceted challenges that require them to think and respond with unprecedented speed. He warns that the “earthquakes” of today’s trade landscape—be they pandemics, political unrest, or tariffs—are becoming increasingly common, necessitating a nimble approach to scenario planning.
Traditionally, scenario planning, as popularised by Shell in the 1970s, was a laborious process that could take weeks or months to formulate and analyse potential futures. In contrast, GenAI enables firms to visualise hundreds of scenarios within minutes. This rapidity is not merely a luxury; it is a competitive imperative. As Van Rossum puts it, “Whoever thinks fastest has a competitive edge.”
The applications of GenAI are diverse and transformative. Cordon remarked on its capability to not only model various tariff scenarios but also illuminate potential consequences that firms may not have anticipated—such as creating unexpected supply chain bullwhips. For example, exorbitant tariffs might lead companies to dump surplus products in different markets, inadvertently impacting businesses that are not directly engaged with the tariffs. Furthermore, he noted that while tariffs often impose challenges, they can also unveil new opportunities, citing an American firm that saw sales triple as consumers opted for used machines over new imports subjected to higher duties.
Recent geopolitical events, specifically the U.S.-UK trade dynamics under President Trump, underscore the necessity of adapting business strategies in light of evolving trade agreements and disputes. Industry players have voiced concerns surrounding the lack of clarity in agreements that directly affect competitiveness—especially in key sectors like steel and pharmaceuticals. These concerns are heightened by the imposition of security requirements aimed at countering Chinese influence, presenting both strategic hurdles and openings for businesses poised to adapt swiftly.
As companies grapple with the shifting trade environment, many adopt a “wait-and-see” strategy, hoping that tariffs will be temporary. However, Cordon cautions against complacency, urging businesses to recognise that some tariffs are likely to persist, thereby necessitating proactive measures. Moving operations—such as relocating from China to Ireland—may seem a viable response, yet the implications could drastically shift should trade agreements evolve rapidly.
Van Rossum encapsulates the dilemma faced by supply chain leaders today: the exponential increase in data points makes traditional models insufficient for informed decision-making. He believes that smart tools like GenAI are essential for regaining oversight in a complex landscape, enabling a comprehensive analysis of the impacts of new tariffs efficiently.
The potential for GenAI to revolutionise scenario planning and risk management in supply chains is compelling. By embracing these advanced modelling techniques, businesses are not only better equipped to navigate uncertainties but are also empowered to transform challenges into opportunities. In an era defined by unpredictability, the ability to swiftly assess and respond to changing conditions is no longer just an advantage; it is essential for survival and success in the global market.
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Source: Noah Wire Services
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