The intelligent supply chain

Leveraging AI in Canada’s supply chains

April 30, 2018
by Louis Roy

Image: Bradbury

On February 15 2018, the Minister of Innovation, Science and Economic Development, Navdeep Bains, announced that SCALE AI, our artificial intelligence-powered supply chain supercluster proposal, would share in the $950 million allocated for the Innovation Superclusters Initiative.

The Canadian supply chain provides almost a million jobs and makes up 10 percent of the country’s GDP, so advancements in this field have the potential to make huge impacts that can improve Canadian living standards and create employment. Our 78 industrial partners in SCALE AI have already committed $700 million in support, and, when combined with the government’s contribution, will provide a sizable pool to drive real innovation. It will then enable artificial intelligence (AI) to make an immediate impact on the evolution of Canadian supply chains and the country’s economy.

The potential repercussions of our supercluster initiative on supply chains are admittedly not something that the average Canadian will immediately connect back to the quality of their own lives, but they definitely should. Supply chains directly affect all Canadians, at every moment. Therefore, the work that will be done by the SCALE AI supercluster will benefit all Canadians for many years to come.

Supply chain challenges
All of the environmental and social challenges that we face as a society can be directly traced back to disjointed and inefficient supply chain infrastructures. By examining the path from raw materials to end-user goods, it becomes clear that greenhouse gas emissions and other environmental pollutants, along with energy and social inequalities, originate as by-products of the decisions made during the supply chain lifecycle.

A clear example of real problems caused by ineffective supply chains would be the proliferation of counterfeit products on the market, especially the very concerning issue of counterfeit drugs, as they can result in death. Consider the consequences of vaccines for children that do not contain the medications identified or, even worse, counterfeiters often simply substitute the vaccine with plain water. This is a very real quality control concern that has and continues to occur in the global pharmaceutical supply chain. Given that this is OPTEL’s area of expertise, we have been very successful in applying technological innovation to mitigate and greatly reduce pharmaceutical fraud, to ultimately safeguard human lives.

Fraud in the supply chain robs firms of not only revenue, but also productivity. Organizations involved in food production and distribution struggle every day to reduce waste, which can stem from inappropriate handling or errors in demand forecasting. Flawed supply chains are also unnecessary contributors of environmental pollutants that can augment other societal costs such as those for healthcare and diminish the quality of life of large portions of the population.

Currently, it is difficult to overcome challenges that result from disjointed and inefficient supply chains because they are not very connected, meaning most organizations have very little visibility over their supply chain processes and networks, which leads to an enormous amount of waste. This is true in every industry and at every step of the end-to-end supply chain.

Potential upside
AI and other technologies can greatly enable supply chain visibility, which then creates crucial improvements in efficiency and connectivity. Since supply chains impact every business and industry, the potential upside to these improvements is astronomical.
Through product tracking, data acquisition and connectivity a smart AI-enabled supply chain provides much needed visibility and the actionable data required to ensure product safety and authenticity, reduce waste, cut distribution costs, increase productivity, and protect the environment. In turn, all these improvements will directly encourage sustainable, ethical, and environmentally friendly economic growth.

SCALE AI is a value creator made up of a mix of stakeholders, from very large firms to start-ups, providing the perfect partnership to boost Canada into an applied-AI powerhouse. Our plan is to leverage existing capabilities and create a deep, lasting effect on Canada’s growth and global advantage by enabling the broader adoption of AI by businesses and upskilling our workforce. It is also perfectly in line with OPTEL’s main goal: Using technologies to create a better world.

Emerging technologies will increasingly disrupt the work of supply chain professionals. As innovative leaders adopt existing and developing technologies to enhance, change, and reinvent strategies and processes, modern supply chain managers must ensure that they are current on new technologies. They also have to anticipate how they might improve their work and, most important, how one can adopt those technologies and leverage them to enhance any organization’s supply chain for strategic advantage.

This initiative could not have been accomplished without the generous contribution of time and effort from our partners. On behalf of myself and my SCALE AI co-chair Hélène Desmarais, chairman, HEC Montréal and executive chairman, CEIM, I would like to thank all of our consortium partners, particularly the academic research institutions, IVADO and the University of Waterloo, and the project team volunteers from organizations such as BCG, CGI, Norton Rose Fulbright, PwC Canada, and the Supply Chain Management Association (SCMA).

In the coming months, OPTEL and all the other contributors will be concluding the contribution agreement with the Government of Canada and will officially launch the operations of SCALE AI. I am excited for our supercluster to begin tackling transformative projects that will accelerate the development and early integration of next-generation, AI-powered supply chains in Canada. Our goal for this supercluster is not only to generate extensive business value, but also increase the wealth and quality of life of all Canadians through technology-driven, sustainable, and inclusive economic growth. I hope you are as excited as I am for what is to come as we embark on this first unprecedented step in Canadian supply chain innovation.

What is SCALE AI?
SCALE AI (Supply Chains And Logistics Excellence AI) is a business-led consortium of 119 partners headquartered in Montreal and centered in Quebec and Ontario. Its mission is to shape a new global supply chain platform and bolster Canada’s leadership in artificial intelligence (AI). It has been given support from the federal government through the Ministry of Innovation, Science and Economic Development’s Innovation Supercluster Initiative.

Louis Roy is president, OPTEL GROUP and co-chair of SCALE.AI.