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Saso in hunt with 18 holes to play

YUKA SASO — LPGA FB PAGE

FILIPINA-JAPANESE Yuka Saso fired a one-under 69 on moving day to stay in the hunt for the 2024 US Women’s Open crown in Lancaster, Pennsylvania.

Ms. Saso, who reigned supreme while representing the Philippines in 2021, submitted nines of 33 and 36 to bring her tally to 208, just three strokes off the pace going to the final 18 holes at the Lancaster Golf Club.

The 22-year-old Saso birdied Nos. 1 and 9 in a hot start but somehow slowed down at the back, where she mixed two birdies with three bogeys.

With her two-under card after 54 holes, Saso is in solo fifth and within striking distance of the trio of Australian Minjee Lee (66), American Andrea Lee (67) and Thai Wichanee Meechai (69), who share the top spot at five-under 205.

The pacesetters are two up on Japanese Hinako Shibuno, who totes a 207 after a 66 ahead of the ICTSI bet.

Ms. Saso, who held pole position in the first 18 holes with a hot 68 but slipped with a 71 in the second, will make the final push Sunday in an afternoon flight with sixth-running Japanese Sakurai Kowai at No. 1.

Ms. Saso is out for redemption after missing the cut in her last start at the Mizuho Americas Open and finishing 29th and 30th at the Cognizant Founders Cup and The Chevron Championships in the week prior. 

Saso’s best finish in 2024 so far was ninth at the T-Mobile Match Play last April. — Olmin Leyba

De Minaur wants superfan around

PARIS — After a week in which the French Open crowd grabbed headlines for all the wrong reasons, Australian Alex De Minaur launched a social media hunt for a young superfan on Saturday.

Following his 4-6, 6-4, 6-3, 6-3 win over Jan-Lennard Struff, 11th seed Mr. De Minaur hugged the boy and gave him a towel before posting on Instagram that he would need him again when he faces Daniil Medvedev in the Last 16.

“That young lad was there from the very first point till the last, with five hours of rain delay,” Mr. De Minaur told reporters.

French Open organizers posted a picture of the boy on social media site X.

“I would have given him everything in my bag,” Mr. De Minaur added. “I just wasn’t thinking straight with the emotions. But he deserved everything. Rackets, shoes, whatever he wanted.” 

“I’m looking at him and thinking… if I was a fan, I would probably be back home, because it was bloody cold out there. I don’t understand what this kid is doing, but he gave me life.”

French Open organizers posted a picture of the boy on social media site X.

“I would have given him everything in my bag,” De Minaur added. “I just wasn’t thinking straight with the emotions. But he deserved everything. Rackets, shoes, whatever he wanted.” — Reuters

Chair umpire rescues ailing bird

DANIIL MEDVEDEV — REUTERS

PARIS — Daniil Medvedev beat Tomas Machac in a marathon French Open third-round match on Saturday but chair umpire Damien Dumusois also received plaudits on Court Suzanne-Lenglen when he rescued an ailing pigeon.

During a changeover in the fourth set, the bird landed on the clay surface in front of Mr. Medvedev’s seat, flapping its wings but seemingly unable to fly. “I hope the bird was okay. It was not looking good,” Mr. Medvedev said.

The umpire climbed down from his chair to remove the bird with a towel. The pigeon attempted to escape by hopping away, but he managed to catch the bird and hand it on to another tournament official as the spectators applauded him warmly.

“But I was like, oh my God, if it gives me an extra minute to breathe, it would be perfect and it did.

“The referee did a good job. He was very gentle… I hope the bird is fine.”

The umpire climbed down from his chair to remove the bird with a towel.

The pigeon attempted to escape his clutches by hopping away, but he managed to catch the bird and hand it on to another tournament official as the spectators applauded him warmly. — Reuters

Challenge accepted

The Mavericks are in the National Basketball Association (NBA) Finals for the first time in the Luka Doncic era, and it’s fair to argue that their run of success in the 2024 Playoffs stems from their willingness to take big risks. In the last one and a half years, they have underscored their capacity to go all in at every turn precisely to get to where they are now. The job’s not done, of course; in the way of their claim to the Larry O’Brien Trophy are the heavily favored Celtics, perhaps only fitting given the strength of the competition they have faced en route. That said, there can be no discounting the significant strides they have made in order to emerge at the top of the stacked West.

Back when the Mavericks acquired All-Star Kyrie Irving in February 2023, the hope was that he would be the perfect complement to Doncic. No doubt, he was a proven crunchtime scorer with a championship pedigree, capable of taking a chunk of the load carried by the engine of their heliocentric system. At the same time, “hope” remained the operative word, since his brilliance on the court was accompanied by glaring missteps off it. It was likewise important that note that he carried with him an expiring contract — which meant that he could very well be a short rental. Given his mercurial nature, there was cause to be wary of his plans.

The Mavericks would go on to miss the 2023 Playoffs, with their 9-18 record after Irving’s arrival putting them once again at a crossroads. Any number of things could have happened then, but they saw fit to double down on their belief that his pairing with Doncic would work out. They contended that the fit between the two marquee names would improve to a healthy degree if the right pieces were gathered. And so they became active in the offseason and, more importantly, at the trade deadline, subsequently coming up with a roster that both maximized the strengths and minimized the weaknesses of their most vital cogs.

In retrospect, P.J. Washington and Daniel Gafford were just what the Mavericks needed to backstop Doncic and Irving. The front office couldn’t have been completely certain of the outcome; the two may well have been a net negative, just as Grant Williams turned out to be. Still, there was no stopping head honchos from taking high-reward gambles — and to argue that these have paid off in spades would be to understate the extent of their accomplishments.

The Mavericks have four days to prepare for their biggest challenge yet. Their competition emerged from the regular season with the best record by far for a reason, and they know they have their work cut out for them if they want to celebrate in downtown Dallas when the battlesmoke clears. Make no mistake, however; they’re not in the least bit fazed by the task at hand. For all the supposed superiority of the Celtics, they know their fate is theirs to craft, and they aim to make the most of the opportunity.

 

Anthony L. Cuaycong has been writing Courtside since BusinessWorld introduced a Sports section in 1994. He is a consultant on strategic planning, operations and human resources management, corporate communications, and business development.

MRT-3 O&M deal auction targeted for first quarter

PHILIPPINE STAR/MICHAEL VARCAS

THE Department of Transportation (DoTr) said it is hoping to auction the operations and maintenance (O&M) contract for Metro Rail Transit Line 3 (MRT-3), and two other big-ticket railway projects by the first quarter of 2025.

“We are working on the terms of reference (for MRT-3). The bidding will be maybe next year,” Transportation Secretary Jaime J. Bautista said on the sidelines of the Philippine Economic Briefing last week.

The DoTr is still determining the scope of the O&M contract that will be bid out.

“The railway system is very difficult to make profitable by itself. For the LRMC (Light Rail Manila Corp.) O&M, it was defined in terms of how much is their share,” Mr. Bautista said.

The DoTr is now working with the Asian Development Bank to develop a public–private partnership (PPP) MRT-3 project, Transportation Undersecretary Timothy John R. Batan said.

“From DoTr, we continue to develop our solicited PPP MRT-3 project. We are being assisted by the Asian Development Bank (like we did) for NAIA (Ninoy Aquino International Airport),” Mr. Batan told reporters at the same briefing.

He said the DoTr may auction the contract by the first quarter of 2025.

The DoTr aims to privatize MRT-3 before the contract expires next year under the build, lease, and transfer agreement with MRT-3 operator Metro Rail Transit Corp.

The government has received two proposals for the MRT-3 project but the DoTr has expressed its intent to offer the project via the solicited route.

Mr. Batan said the Metro Pacific Investments Corp. (MPIC)-Sumitomo consortium recently submitted an unsolicited proposal for the MRT-3.

“There was a recent resubmission of the unsolicited proposal under the new PPP code. The Metro Pacific Sumitomo consortium (are) the proponents of the recent resubmission,” Mr. Batan said.

Under the new PPP code, submissions of unsolicited proposals are sent to the PPP center for an initial completeness evaluation.

However, the unsolicited proposal of the MPIC consortium was returned by the PPP Center for not being complete, Mr. Batan said.

In 2022, San Miguel Corp. was declared the original proponent for the MRT-3 O&M contract.

In January, MPIC Chairman, President and Chief Executive Officer Manuel V. Pangilinan said the company is working on a potential partnership with SMC and even considering submitting a joint proposal for the O&M of MRT-3. 

Meanwhile, Mr. Bautista said the DoTr may also conduct auctions for the O&M contracts of two major railway projects next year.

“That will be next year, simultaneously with the (planned bidding) of MRT-3,” he said when asked on the government’s timeline for auctioning the Metro Manila Subway Project and the North-South Commuter Railway (NSCR) contracts.

Last week, Philippine National Railways (PNR) said the northern part of the NSCR is now 60% complete, with the Clark to Valenzuela leg expected to be finished within the next two years. 

In March, the PNR suspended the operations of PNR’s Tutuban-Alabang commuter operations to fast-track NSCR construction.

The P873-billion project is being co-financed by the Japan International Cooperation Agency and the Asian Development Bank. It will have 35 stations and three depots.

Once fully operational the entire NSCR system is projected to reduce travel time between Clark and Calamba to two hours, against the current four to 4.5 hours.

MPIC is one of the three key Philippine units of Hong Kong-based First Pacific Co. Ltd., the others being Philex Mining Corp. and PLDT Inc.

Hastings Holdings, Inc., a unit of PLDT Beneficial Trust Fund subsidiary MediaQuest Holdings, Inc., has a majority share in BusinessWorld through the Philippine Star Group, which it controls. — Ashley Erika O. Jose

13 projects added to PPP pipeline

PPP.GOV.PH

THE Public-Private Partnership (PPP) Center said 13 additional PPP projects are now awaiting, most of which are local government projects.

“These are in various stages of the project development process. Some are in the more advanced stages, while others are still undergoing investment studies,” PPP Center Deputy Executive Director Jeffrey I. Manalo told reporters last week.

Among the additional 13 new projects are the Pampanga Bulk Water Supply Project worth P18.7 billion, the Civil Aviation and Immigration Security Services project (P16.9 billion), and the Department of Health’s Digital Infrastructure for the Philippine National Cancer Registry and Next-Gen Clinical Research (P2.21 billion).

The PPP Center had also delisted four proposals, — the Cavite Tagaytay Batangas Expressway Project, an unsolicited proposal for the EDSA Bus Rapid Transit (BRT), an unsolicited proposal for the Development, Operations, and Management of the Davao International Airport, and an Advance Passenger Processing and Passenger Name Record project for the Bureau of Immigration.

The delisted projects were either rejected by the implementing agencies or not included in the list of approved projects.

This would bring the total number of projects in the government’s pipeline to 136, valued at P3.03 trillion. Of these, 103 are national projects, while 33 are local.

Some 68 are transportation projects, 25 property development, and 16 information and communications technology.

These were followed by health (7), agriculture and food security (4), power and energy (3), water and sanitation (6). One project involves tourism, and one is yet to be determined.

The PPP Center said that most of the additional projects were unsolicited proposals endorsed to implementing agencies for their decision to proceed with detailed evaluation or rejection.

Mr. Manalo said about five projects are in the advanced stages of the PPP process, and are expected to be awarded by the end of 2024.

Among the projects are the Tarlac-Pangasinan-La Union Expressway expansion project, the expansion and upgrade of Laguindingan Airport in northern Mindanao, the New Bohol Airport, the UP-PGH Cancer Center, and the Dialysis Center for the Baguio General Hospital and Medical Center.

“Those are the five projects that we expect to be awarded by end 2024. And then for possible award by end of this year or next year, (another) three,” he added.

The PPP Center has said that it is seeking to submit 15 PPP projects to the National Economic and Development Authority-Investment Coordination Committee for approval this year. — Adrian H. Halili

Indirect exporters to Europe urged to comply with EU carbon rules

REUTERS

EVEN COMPANIES that do not export to Europe will need to comply with the European Union’s (EU) Carbon Border Adjustment Mechanism (CBAM), the Philippine Exporters Confederation, Inc. (Philexport) said.

In a statement on Friday, Philexport, citing an official of SGV & Co., said that Philippine direct and indirect suppliers to the EU also need to familiarize themselves with the rules.

Lucil Vicerra, indirect tax services leader and global trade and customs partner at SGV, said that CBAM must be viewed as a mechanism that will steer Philippine businesses towards “remaining competitive in the global market.”

“Acting now, while recognizing that it is a longer-term endeavor, will lead to a competitive advantage over regional peers,” Ms. Vicerra said.

“By meeting CBAM requirements, businesses can demonstrate environmental responsibility, maintain current EU business, capture additional market share, and establish themselves as industry leaders,” she added.

She said that even exporters not directly exporting to the EU could still be affected if their customers that buy their materials and products export to Europe.

“CBAM does not only cover direct exports from the Philippines to the EU; it also covers indirect imports,” Ms. Vicerra stated.

She said that if an exporter from another country exports a product for which some materials were made in the Philippines, the direct exporter will need to ask the Philippine exporter for the carbon emissions data.

“The responsibility is there for Philippine companies that are indirectly exporting to the EU (to) understand what is being required of us,” she added.

She said that although the indirect exporters from the Philippines will not be affected by the policy in terms of cost, the exporters may lose out to other CBAM-compliant manufacturers if they are not able to comply with the direct exporters’ requirements.

“This could happen if the non-EU manufacturer is unable to comply with the requirement to calculate and provide the carbon emissions data, and the non-EU distributor is unable to provide its customers with the emissions data from the supplier and manufacturer,” she said.

“Filipino companies are thus advised to see compliance with CBAM regulation as a ‘transformative journey’ that has to be taken,” she added.

CBAM is a tariff on carbon-intensive products, such as steel and cement, that are imported into the EU. It entered into force on a transitional basis on Oct. 1. — Justine Irish D. Tabile

Danish companies still citing red tape issues

By John Victor D. Ordoñez, Reporter

DANISH companies see potential for improving the Philippine business environment but are still concerned about governance issues and red tape, the Danish Ambassador to the Philippines said.

“The Danish business community is split in the sense they see tremendous potential, they believe the economy will grow, they believe it will remain a strong consumer market, so the potential is there,” Ambassador Franz-Michael Mellbin told BusinessWorld on the sidelines of the Copenhagen Infrastructure Partners (CIP) launch of a Light Detection and Ranging (LIDAR) system intended for its planned offshore wind project in Camarines Sur on May 30.

“But they worry about governance issues, they worry about the customs system, and they worry about red tape. So right now, there is a good opportunity in the Philippines to address those things.”

Last year, CIP, through its subsidiary Copenhagen Infrastructure New Markets Fund Philippines, became the first fully foreign-owned company awarded wind energy service contracts by the Department of Energy after the Philippines opened up renewables to full foreign ownership.

The planned offshore wind projects are in Camarines Norte and Camarines Sur, with capacity projected at 1,000 megawatts (MW); Northern Samar (650 MW); and Pangasinan and La Union (350 MW).

CIP last week launched its LIDARs for its 1-gigawatt offshore wind power project in San Miguel Bay in Camarines Sur, which the company expects to be complete by 2028.

The devices use laser technology to measure wind speeds to assess an area’s capacity to generate wind energy.

The Board of Investments granted CIP’s projects green lane certificates of endorsement to fast-track the processing of permits.

Mr. Mellbin added that more Danish companies involved in renewable energy are keen on investing in the Philippines.

“Red tape is a big issue for investors, but there’s also been a lot of work done to make it easier for people in the renewable sector,” he said.

The envoy said the Philippines has the potential to develop robust renewable energy projects due to its diverse natural resources such as wind, solar and biomass.

“But these energy projects, especially on the wind side, are so large and capital intensive that you need a lot of partnerships,” he said.

“You need partnerships with the government, both the central government and the provincial government, but you also need Filipino business partners.”

PEZA pins US investment hopes on Luzon corridor

Photo from facebook.com/PEZAPH

THE PHILIPPINE Economic Zone Authority (PEZA) said it is looking for more US investments in logistics and infrastructure, many of them likely to be tied to the Luzon Economic Corridor.

In a statement on Sunday, PEZA Director General Tereso O. Panga said that the upcoming Luzon Economic Corridor will boost investment in economic zones.

“We also see our investors taking advantage of the upcoming Luzon economic corridor which will support connectivity among Subic Bay, Clark, Manila, and Batangas as well as facilitate strategic, anchor investments within each hub in high-impact infrastructure projects, among others,” he added.

The US Trade and Development Agency has said that it will aid the Philippines with feasibility studies for projects in developing the corridor.

The corridor is focused on improving infrastructure such as rail and ports, as well as strategic investments in semiconductors, clean energy, and supply chains.

PEZA has said that it was looking at $100 billion in prospective investment deals from the US and Japan in electronic manufacturing services, manufacturing and supply chains, clean energy, agri-business, rail, and port infrastructure.

“We cannot pass up on the current developments and opportunities in ally-shoring as the Philippines is still in the sweet spot for attracting investment,” Mr. Panga added.

He said Ecozone Logistics Service Enterprises could facilitate the entry of more logistics companies to support upcoming new ecozone locators.

It said that the China+1 location strategy being pursued by many companies, the US CHIPS Act, and the US-Japan-Philippines trilateral agreement could be leveraged to attract more investment.

“PEZA remains bullish in increasing its more than 300 companies with US equity in the Philippines and bring in more investment and jobs,” it added. — Adrian H. Halili

Airline recovery, ticket prices holding back PHL travel growth – Trip.com

PHILSTAR

By Justine Irish D. Tabile, Reporter

SHANGHAI — The airline industry recovery and ticket prices remain constraints on hotel and travel industry growth, according to Singapore travel booking service Trip.com Group.

Trip.com Assistant Vice-President for International Markets Yi Ru said the Philippine hotel industry remains slow due to the limited airline capacity for inbound travelers.

“We still need more flight recovery (in the Philippines). We have the honest demand to be able to bring a lot of travelers from all major countries to the Philippines,” she said at a media briefing last week.

“Flights are our bottleneck; if they don’t recover first, then hotels won’t be able to recover. So I think specifically for the Philippines, maybe flight capacity is the challenge,” she added.

She cited the need to add more capacity to and from China to bring more inbound tourism to the Philippines.

“As long as there are few direct flights and limited capacity, that means prices will be high. And customers, during their whole booking journey, always look at how much the cost of the flight is first and then only think about the other expenses,” she added.

Trip.com has communicated to airlines and the government the need to add capacity, she said.

Asked about which other countries need to add capacity, she said: “Japan, Korea, Thailand, Singapore, Malaysia, Indonesia… we see the huge demand from Vietnam, which is being limited by flight capacity.”

She said airlines are nearly there in returning to pre-pandemic capacity levels, at least in the top destinations, led by visa-free entry countries like Singapore, Malaysia, and Thailand.

On the sidelines of the Envision Conference last week, Jane Sun, chief executive officer of Trip.com, said that the group is looking to grow faster than the industry average in terms of recovering its 2019 levels of business.

“The travel market recovered by 70% based on flight capacity. The industry estimates the market to recover 80%, and Trip.com hopefully will far exceed that number,” she added.

Ms. Sun said that some regions have still not fully recovered in terms of airline capacity, such as the US, which is at 40% recover, and Europe, which is at 60–70%.

“But there are certain regions that do very well, such as the GCC (Gulf Cooperation Council) countries, which include Abu Dhabi, the United Arab Emirates, Qatar, and Saudi Arabia,” she said.

DA bans cattle, beef imports from UK

REUTERS

THE Department of Agriculture (DA) said on Sunday that it ordered a temporary ban on live cattle and beef imports from the UK due to a case of Bovine Spongiform Encephalopathy (BSE) or Mad Cow Disease detected in the British herd.

In a statement, the DA said that shipments of live cattle, meat, meat products, bovine processed animal proteins, and cattle semen originating from the UK will not be allowed entry.

“The temporary import ban was issued due to an occurrence of classical strain, C-type BSE which was detected in South Ayrshire, Scotland on May 10,” the DA said.

It added that the UK government reported the case to the World Organization for Animal Health and an official letter was sent to the DA.

Mad Cow disease can cause fatal nerve damage in cattle and its entry or possible spread in the country could undermine the livestock industry and compromise food safety.

BSE is also zoonotic and may pass from animal to humans causing Creutzfeldt-Jakob disease in humans, which causes brain shrinkage and deterioration.

“In order to facilitate continuous trade while mitigating the possible risk of spread of BSE infection, all shipments coming from the United Kingdom that are already in transit, loaded or accepted unto port shall be allowed provided that the products were slaughtered or produced on or before April 10,” the DA added.

The DA added that it would implement more stringent inspections of all arrivals of meat and meat by-products derived from cattle, including live animals and bovine processed animal proteins at the ports of entry. — Adrian H. Halili

Building efficient and resilient supply chains with GenAI

IN BRIEF: 

• Businesses are focused on advancing their AI supply chain pilot projects into fully functioning applications.

• GenAI can serve as a dynamic tool and a force multiplier in fortifying supply chains.

• Despite its limitations, GenAI provides a multiplier in what technology and humans can achieve together in building efficient and resilient supply chains, whether in planning, sourcing, making or moving.

In the wake of the global pandemic, businesses remained focused on advancing their artificial intelligence (AI) supply chain pilot projects into fully functioning applications. Companies are turning more to AI for demand planning and procurement within their supply chains, and are also investigating its potential for streamlining processes and enhancing efficiency in final-stage delivery. However, the rapid emergence of Generative AI (GenAI), brought to prominence by ChatGPT, has dramatically shifted perceptions about the capabilities of AI.

GenAI is adept at producing new content that includes images, text, audio, or video, drawing from its training data. This technology isn’t new, but recent developments have streamlined its use and enhanced its practical value. As funding flows into this technology, leaders are swiftly assessing how it affects their operations and business structures, aiming to capitalize on its benefits. For those who diligently and strategically engage with innovation while maintaining an awareness of its limits — rather than impulsively chasing trends — GenAI can serve as a dynamic collaborative partner and a force multiplier in fortifying supply chains.

What might have once been considered fictional is now part of serious conversations. AI applications are already being put into practice in real-world scenarios throughout the entire supply chain. These are made possible by GenAI’s capabilities to organize and sort information based on visual or textual inputs, rapidly assess and adjust strategies, plans, and the distribution of resources in response to live data, produce various types of content on-demand, leading to quicker reaction times, summarize vast amounts of data while highlighting essential insights and patterns, and quickly help retrieve relevant information and deliver immediate responses, whether through voice or text.

While it does have its limitations, GenAI provides a multiplier in what technology and humans can achieve together in building efficient and resilient supply chains, whether in planning, sourcing, making or moving.

PLANNING
GenAI streamlines engagement across technology-driven planning activities. Modern GenAI applications are also capable of proposing multiple strategies in case of unforeseen complications. The area of risk management stands out as particularly promising, especially in anticipating risks that supply chain planners might not have previously contemplated. Numerous organizations are leveraging AI to sift through extensive historical sales data, market movements, and other factors to construct real-time models of demand. In addition, GenAI enables the formulation of ideal inventory quantities, manufacturing timetables, and distribution strategies to efficiently satisfy consumer needs.

AI can assist in orchestrating production and timetabling by taking into account elements such as changes in customer orders, production capacity, resource availability, and the priority of orders. Similar to its capabilities in forecasting demand, GenAI can devise production plans, scheduling sequences, and efficiently allocate resources to reduce bottlenecks and optimize production efficiency.

Currently, AI can be utilized to scrutinize historical data, market dynamics, climatic trends, and geopolitical occurrences, among other information sources, to pinpoint potential risks within the supply chain. Rather than relying on preset dashboards, for instance, GenAI can be prompted to generate on-the-spot risk evaluations, simulate various scenarios, and craft strategies for risk mitigation to aid planners in proactively overseeing and reducing risks.

SOURCING
Beyond negotiating, GenAI offers a chance to enhance supplier engagement and oversight, providing guidance on subsequent actions. These useful tools can quickly pull information from extensive contracts, potentially helping prepare for discussions about contract renewals. In managing suppliers, companies can utilize natural language processing to derive insights from supplier communications and various data points. It can support the supervision and analysis of supplier interactions, pinpoint potential problems, and foster stronger supplier partnerships.

Moreover, GenAI can assist in the process of choosing suppliers by evaluating a broad spectrum of supplier data and producing insights. By considering aspects such as supplier performance, capabilities, pricing, and risk assessments, GenAI algorithms can offer suggestions or rankings to support well-informed decision-making.

MAKING
GenAI is revolutionizing the supply chain by significantly accelerating the journey from concept to commercialization, even when it involves new materials. Organizations are educating algorithms on their proprietary data and then employing AI to uncover methods to enhance productivity and efficiency. Predictive maintenance is yet another area where GenAI can pinpoint which machinery or production lines are at risk of malfunctioning and when, thereby enhancing overall equipment effectiveness (OEE) — a critical metric in manufacturing.

In product design, GenAI can rapidly generate and assess numerous design alternatives based on set criteria, drastically accelerating the innovation cycle. This approach can be applied to a wide range of design challenges, from engineering new components for industrial machinery to creating consumer goods that are more efficient, robust, or visually attractive. Informed by data from factory machinery, GenAI models can also devise new maintenance strategies that align with predicted failure times of equipment. This enables manufacturers to fine-tune their maintenance timetables to intervene only when necessary, minimizing operational interruptions and expenses while also prolonging machinery lifespans.

In addition, GenAI can be used to unearth new materials and refine existing ones. By analyzing extensive data on material characteristics and experimenting with various combinations, it can recommend new materials with specific desired traits or enhance the properties of current materials. This innovation could lead to the development of materials that are more efficient, sustainable, or durable for manufacturing purposes.

MOVING
Although GenAI application in the field of logistics isn’t new, the generative aspect introduces new levels of adaptability. For example, it can be used for route optimization for reduced fuel usage, the prioritization of specific shipments, or integration of various factors into an accessible platform.

GenAI can optimize global trade by assessing a wide range of factors, such as tariffs, customs rules, trade agreements, and shipping expenses, to propose the most effective and economical routes and strategies. This helps businesses to maneuver through intricate global trade networks, ensuring compliance while cutting costs. Additionally, GenAI can improve the design of logistics networks by considering elements such as warehouse locations, transportation links, and demand patterns to generate efficient configurations. This results in shorter delivery times, decreased expenses, and heightened service quality.

One of the significant challenges in logistics is real-time routing, which GenAI can address by constantly refining and enhancing delivery or collection routes in response to evolving conditions such as traffic, weather, and delivery priorities. This leads to heightened efficiency, lower fuel usage, and greater customer satisfaction.

REALIZING VALUE WITH GENAI
GenAI is a potent instrument with its own set of constraints, but it should not be mistaken for a strategy in itself. Organizations must focus on the business benefits and establish a roadmap, guided by the following steps:

Focus on domain-wide transformation. Identify use cases with significant potential, aiming to create an integrated ecosystem that complements traditional business practices and unlocks new opportunities.

Coordinate and collaborate. Discuss the broader implications of using GenAI and pinpoint the competencies needed across various departments, extending beyond just the technical roles.

Maintain an open mindset while being mindful of risks. Launch exploratory pilot projects to gain insights, secure early successes, and work towards a model that can be expanded and adopted on a larger scale.

Utilizing AI in supply chain management can help organizations become more resilient and sustainable while transforming cost structures. With recent developments that make AI easier to use and more effective in realizing value, organizations must evaluate how its advances can impact their sectors.

This article is for general information only and is not a substitute for professional advice where the facts and circumstances warrant. The views and opinions expressed above are those of the author and do not necessarily represent the views of SGV & Co.

 

Jan Ray G. Manlapaz is a consulting partner and Mary Andrea T. Bacani is a Supply Chain and Operations (SCO) senior manager of SGV & Co.

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