Why BMW Uses Artificial Intelligence to Manage Supply Chain Risks
BMW is turning to artificial intelligence to control one of the most complex and vulnerable functions of the automotive industry.:with its global procurement and supplier network worth 90 billion euros, Automotive News reports.
According to Nikolai Martin, BMW's Board member for Procurement, artificial intelligence-based decision support is becoming the main management tool in the face of geopolitical turmoil, unstable demand and regionalization. The company has implemented four high-performance artificial intelligence agents, called "new colleagues," that analyze cross-functional data in real time to help make decisions about flexibility, materials strategy, supplier risks, and trade-offs between cost and sustainability. Even small benefits have a significant financial impact: freeing up only 1% of flexibility costs can save almost 1 billion euros. Instead of abandoning global supplies, BMW wants to move from risk avoidance to dynamic risk management, using artificial intelligence to balance price, safety and speed, as evidenced by its rapid response to disruptions in semiconductor supplies.
At the same time, the regionalization of development, especially in China's rapidly changing electric vehicle market, shortens production cycles and complicates supplier contracts, making traditional planning tools insufficient. Martin also sees artificial intelligence as a lever to transform supplier relationships from price pressure to value creation and information exchange, given that purchases account for about 70% of the cost of a car. To succeed, BMW focuses on transparency and employee trust, positioning artificial intelligence not as a substitute, but as a means to create a more resilient, adaptive, and data-driven purchasing organization.