September 2005 – The case study of a major U.S. retailer purchasing Indirect Materials is interesting as their cost savings and access to innovation steadily declined when their core supply base was rationalized down to 100 suppliers.
The decline was due to the retailer’s narrowing of its source of truth to 100 suppliers. In short, they lost touch with the market in general. As a result, their COGs steadily increased to 23 percent above the current market rate.
Why Did This Happen?
July 2024 – Here is an excerpt from the article The Looming AI Collapse: Navigating the Risks of Self-Referential Learning regarding AI and Self-Referential Learning:
“In a digital age where artificial intelligence (AI) is at the forefront of technological innovation, a concerning paradox has emerged: the very technology designed to advance our capabilities is now at risk of self-induced collapse. Recent studies from the University of Oxford have brought to light a critical issue in the AI domain—AI systems, like OpenAI’s ChatGPT, are increasingly learning from their own generated content. This phenomenon, if left unchecked, could lead to a significant degradation in the quality and reliability of AI outputs.“
The Questions We Must Ask:
- What are the parallels between the retailer case reference and the current-day article?
- What do the 2005 and 2024 examples tell us about Artificial intelligence?
- Why do 80% of AI initiatives fail today?
Post Takeaway: Your AI initiative will fail if you can’t confidently answer the above three questions.
30
Procurement Insights
Your answer to these 3 questions will determine if your AI initiative will succeed or fail
Posted on July 29, 2024
0
September 2005 – The case study of a major U.S. retailer purchasing Indirect Materials is interesting as their cost savings and access to innovation steadily declined when their core supply base was rationalized down to 100 suppliers.
The decline was due to the retailer’s narrowing of its source of truth to 100 suppliers. In short, they lost touch with the market in general. As a result, their COGs steadily increased to 23 percent above the current market rate.
Why Did This Happen?
July 2024 – Here is an excerpt from the article The Looming AI Collapse: Navigating the Risks of Self-Referential Learning regarding AI and Self-Referential Learning:
“In a digital age where artificial intelligence (AI) is at the forefront of technological innovation, a concerning paradox has emerged: the very technology designed to advance our capabilities is now at risk of self-induced collapse. Recent studies from the University of Oxford have brought to light a critical issue in the AI domain—AI systems, like OpenAI’s ChatGPT, are increasingly learning from their own generated content. This phenomenon, if left unchecked, could lead to a significant degradation in the quality and reliability of AI outputs.“
The Questions We Must Ask:
Post Takeaway: Your AI initiative will fail if you can’t confidently answer the above three questions.
30
Share this:
Related