Leveraging Artificial Intelligence to Mitigate Supply Chain Vulnerabilities: Insights from the Malaysia Supply Chain Pressure Index (MSCPI)

Abstract

The increasing complexity of global supply chains has exposed economies to systemic vulnerabilities arising from pandemics, geopolitical tensions, logistics constraints, commodity price volatility and climate-related disruptions. Malaysia is highly sensitive to these pressures because its trade, manufacturing, port and logistics systems are closely linked to regional and global production networks. Previous work on the Malaysia Supply Chain Pressure Index (MSCPI) provides a Malaysia-specific measurement of supply chain stress using Principal Component Analysis and indicators related to transportation, trade, production, logistics, labor, climate and macroeconomic conditions. However, an index-based monitoring approach remains primarily descriptive unless it is connected to predictive analytics and decision-support mechanisms. This article proposes an Artificial Intelligence (AI)-enabled framework that leverages MSCPI as a structured analytical input for forecasting supply chain stress, detecting early warning signals, identifying vulnerability drivers and supporting mitigation decisions. The proposed framework integrates MSCPI with machine learning and time-series modelling approaches, including Random Forest, gradient-based models and sequence learning, to capture nonlinear and lagged relationships between macroeconomic indicators and supply chain stress. The article argues that AI can transform MSCPI from a retrospective stress indicator into a forward-looking policy intelligence tool. The discussion shows that transportation costs, trade fluctuations, industrial production, labor dynamics, exchange rate movements and climate variables are useful inputs for risk prediction. The study contributes conceptually by linking index construction, AI-based prediction and resilience-oriented policy action within the Malaysian supply chain context. It offers practical guidance for policymakers, industry stakeholders and researchers seeking to strengthen proactive supply chain vulnerability mitigation.