A comparative assessment of causal machine learning and traditional methods for enhancing supply chain resiliency and efficiency in the automotive industry

Abstract

Efficient supplier escalation is crucial for maintaining smooth operational supply chains in the automotive industry, as disruptions can lead to significant production delays and financial losses. Many companies still rely on traditional escalation methods, which may lack the precision and adaptability offered by modern technologies. This study presents a comparative analysis of decision-making strategies for supplier escalation, evaluating causal machine learning (CML), traditional machine learning (ML), and current escalation practices in a leading German automotive company. The study employs an explanatory sequential mixed method, integrating the Analytical Hierarchy Process (AHP) with in-depth interviews with 25 industry experts. These methods are assessed based on several performance metrics: accuracy, business impact, explanation capability, human bias, stress test, and time-to-recover. Findings reveal that CML outperforms traditional ML and existing approaches, offering superior risk prediction, interpretability, and decision-making support Additionally, the research explores the internal acceptance of these technologies through the Technology Acceptance Model (TAM). The results highlight the transformative potential of CML in enhancing supply chain resilience and efficiency. By bridging the gap between predictive analytics and explainable AI, this research offers valuable guidance for firms seeking to optimize supplier management using advanced analytics.