Digital supply chain surveillance using artificial intelligence: definitions, opportunities and risks

Abstract

Digital Supply Chain Surveillance (DSCS) is the proactive monitoring and analysis of digital data that allows firms to extract information related to a supply network, without the explicit consent of firms involved in the supply chain. AI has made DSCS to become easier and larger-scale, posing significant opportunities for automated detection of actors and dependencies involved in a supply chain, which in turn, can help firms to detect risky, unethical and environmentally unsustainable practices. Here, we define DSCS, review priority areas using a survey conducted in the UK. Visibility, sustainability, resilience are significant areas that DSCS can support, through a number of machine-learning approaches and predictive algorithms. Despite anecdotal narrative on the importance of explainability of algorithmic results, practitioners often prefer accuracy over explainability; however, there are significant differences between industrial sectors and application areas. Using a case study, we highlight a number of concerns on the unchecked use of AI in DSCS, such as bias or misinterpretation resulting in erroneous conclusions, which may lead to suboptimal decisions or relationship damage. Building on this, we develop and discuss a number of illustrative cases to highlight risks that practitioners should be aware of, proposing key areas of further research.