Artificial intelligence in the supply chain: Legal issues and compliance challenges

Abstract

Driven by the rise of Big Data and improvements in computational power, artificial intelligence (AI) solutions are transforming entire industries, including their supply chains. These technologies can leverage the collection of data across a wide variety of supply chain sources, bringing optimisations to everything from customer engagement to business intelligence, but they are not without risks. The process of implementing AI into supply chain management practices can easily lead to noncompliance without a robust data governance strategy at a company level. In order to mitigate these risks, as well as ensure standards of safety and quality, a critical examination of all AI technologies across their entire life cycle is required. This paper serves to outline recent developments in AI technology and how they have been implemented in supply chain management across industries. The risks of implementing AI solutions in the supply chain are discussed through case studies as well as recent litigation involving breaches of data privacy laws, licensing agreements and other liability stemming from inappropriate use of AI technologies. A summary of the current state of AI law and policy in the US and European Union (EU) serves as a basis for recommendations for adoption of responsible AI practices. Through the establishment of AI governance frameworks that assess risks at all stages of the implementation process, AI solutions can be designed and implemented that are reliable, secure and resilient.