Starbucks (SBUX) made headlines last week when it fired its AI ‘employee’, a development that came as a surprise to many who were wondering if the technology would eventually replace baristas. The company had developed an AI system with a firm called NomadGo, essentially to track inventories for a better supply chain process. Since the company’s supply chain is extremely fragmented and relies on local suppliers, it has been a challenge for the management for some time. The AI was supposed to resolve this by not only automating the inventory management but also ordering new items whenever inventory levels went low. As it turned out, it did a horrible job.
Apart from incorrect product recognition, the system also failed at something as simple as counting. As a result, it multiplied the impact of existing supply chain issues, resulting in what the management dubbed ‘disaster faster'. Most of the employees would see this as a welcome development though, ensuring their jobs are safe, for now.
