Artificial Intelligence for Asset Management and Investment

Chapter 16Supply Chain Science

UNLIKE MANUFACTURING, SOME INVESTMENT MANAGEMENT firms may not have highly advanced procurement and supply chain functions. Procurement may be viewed as a tactical operation focused on buying categories such as office supplies and computers. As we become more advanced in AI, our dependence and reliance on strategic supply chains will become even greater. Our sourcing of sophisticated data, solutions providers, outsourcing operations, and advanced hardware will become instrumental for our success. Strategic excellence comes from building supply chains that have the following attributes: resilience, rigor, redundancy, reliability, refortification, and responsiveness.

WHO IS RESPONSIBLE FOR SUPPLY CHAIN SCIENCE?

Asset management firms will need reliable supply of data, hardware, and services and hence need to formalize sourcing and supply chain functions. This means creating senior supply chain officer positions. This position can report to the head of data operations. Recall that we recommended a function specializing in data procurement. The broader supply chain group, however, does more than procuring data. It is also responsible for all other procurement undertaken by the firm.

HOW TO THINK ABOUT SUPPLY CHAINS

Supply chains are complex networks. They display complex behavior and are considered as complex adaptive systems (CAS). While CAS are nonlinear systems, many supply chains are modeled as linear systems, and that often creates problems. ...