Company uses AI to help manufacturers map ‘ethical’ supply chains, but warns ‘its not a magic wand’
Fox News
A software company is looking to use artificial intelligence (AI) to help companies mitigate and avoid human rights risks in their supply chain.
“When it comes to transparency in supply chains, there is such an enormous amount of data that is being spread not just in spreadsheets but also through social that we can start to use to identify and zero in,” Justin Dillon, CEO and Founder of FRDM, told Fox News Digital, adding that it’s “early, early days” for the technology and methods his company uses.
Any AI technology requires significant amounts of data to analyze and process, and Dillon pointed to a treasure trove of data available on social media that his company can use to help map out problematic hotspots in supply chains — areas that companies can then work to avoid and help create more ethical routes.
Dillon related a story from a father in Australia who was talking about using “social listening,” which is the analysis of conversations and trends related to different brands. Marketing firms have used social listening, also known as social media listening, to help companies figure out their image on different platforms and reshape it.
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Large Language Models are speeding up spend data cleansing by over 90%, according to FRDM: A large Fortune 100 company with 70,000 direct suppliers can get their supply chain mapped up to tier three suppliers in days rather than months or even years. The tiers note degrees of separation from a vendor, with tier one presenting direct supplies while tier three suppliers are suppliers to direct suppliers.
Over 80% of the supply chain remains unstructured, which Dillon quipped is code for “a hot mess.”
“Less than 6% of companies have visibility beyond tier one suppliers,” he wrote on a blog post from April this year. “For most companies, their supply chain data is a sock drawer where nothing matches. COVID exposed this.”
“Disparate ERP (Enterprise Resource Planning) software, legacy IT systems with hand-cuffed data, multiple-language and multi-currency spreadsheets are just a few of the challenges procurement professionals deal with on a daily basis,” he said.
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Those same tools though can pick up practices documented on social media by users who aren’t even aware of what they’re doing, helping companies like FRDM to map out instances of human rights abuses.
In the case of the Australian father, he saw kids using their phones to upload videos of child laborers in textile mills in Turkey, unaware they were “literally live-streaming exploitation.”
“He was able to find these kids with phones who didn’t know any better and were just showing themselves sewing in shops,” Dillon explained.
“Social listening is going to become a big, big tool to be able to identify where there might be a hotspot around child labor, forced labor, indentured servitude or some type of exploitation in a supply chain.”
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Organizers of the Qatar World Cup admitted that workers were exploited while contracted for FIFA’s preparation tournaments in the Gulf State, which critics had long claimed but the country had either avoided addressing or dismissed.
Finding the data and processing is not enough, though, which is where FRDM enters the equation: The company uses large language models, the more commonly known and used form of AI technology, to help “connect those dots.”
Unfortunately, Dillon admits, it is impossible to create a fully ethically clean supply chain, and most companies likely to not care to commit to a truly transparent and ethical supply chain. Instead, they’re just “looking for a box to check” so they feel comfortable passing U.S. regulations that mandate goods are made without forced labor or risk having them seized at the border.
“Words like ethical and sustainable – they’re such nebulous terms,” Dillon argued. “It’s kind of like fitness: It’s really never done, there’s no box to check … where you can go ‘now that’s done.’ The problem with ethical sourcing or sustainable sourcing or transparency is that it truly is never done.”
“I believe that all of the pressure, both from media and certainly from government, is putting pressure on the companies to start building systems they’ve never had before,” he added. “Companies have not had to build transparent supply chains.”
Dillon highlighted as his greatest concern that companies will look to fix one part of the supply chain.
“We’re getting companies coming to us saying, ‘Oh, I need to use your technology so that you can give me a stamp of approval to run through CBP’s detention like we did,’ but there’s no stamp of approval,” Dillon explained. “You have to map your supply chain. Those are literally CBP’s word is: Map your supply chain. So that’s what’s on business right now.”
“They’re very fortunate because it does provide an accelerator, but it’s not a magic wand, and it’s pretending to be far more than it is,” Dillon said.