Are You in Control of AI in Your Supply Chain?

• by Olivia Lawlor-Blackburn
• Advent IM Blog

Artificial intelligence is becoming a silent partner in the services and systems your suppliers provide. From automated workflows to predictive analytics and intelligent reporting tools, AI is everywhere—and it may be operating in ways your team isn’t fully aware of.

For businesses, this presents both opportunities and risks. While AI can drive efficiency and insights, it also raises questions around accountability, transparency, and compliance. If your suppliers are using AI without oversight, you could be exposed to operational, regulatory, and reputational risks.

Understanding the Hidden Risks

Even if your organisation hasn’t adopted AI directly, your supply chain might already be relying on it. Without a clear understanding of how it’s being used, you could face challenges in areas such as data security, decision-making processes, and regulatory compliance. AI-driven tools can make automated choices that affect your operations, but if the rationale behind those decisions isn’t clear, it can create blind spots in risk management.

AI can also amplify existing biases or errors within supplier processes. Decisions influenced by opaque algorithms can have consequences ranging from inefficiencies and quality issues to breaches of legal or ethical standards. For organisations committed to strong governance, these are risks you need to identify and manage proactively.

How to Build Oversight Into Your Supply Chain

Managing AI-related risks isn’t about avoiding innovation—it’s about taking a structured, proactive approach. The first step is knowing where AI is being applied and how it’s controlled. This means engaging with suppliers early in the relationship, asking the right questions, and establishing clear expectations around data handling, transparency, and accountability.

Contracts should include explicit terms around AI usage, and ongoing reviews are essential to ensure that AI-driven processes continue to meet your standards. In addition, planning for supplier transitions or exits should consider how AI systems, models, and data are managed, so your organisation doesn’t inherit hidden risks.

Turning AI Risk Into Confidence

A thoughtful approach to AI in your supply chain transforms uncertainty into a strategic advantage. By embedding governance and compliance into every stage of supplier engagement—from onboarding to ongoing monitoring—you gain visibility into how AI is shaping your supply chain and maintain control over outcomes.

Ultimately, understanding and managing AI in your supplier network isn’t just about mitigating risk—it’s about enabling your business to benefit from innovation safely, responsibly, and confidently.