How the Metaverse addresses supply chain challenges for the healthcare and life science sector

Christoph von Burgsdorff

Luther Lawfirm, Hamburg

christoph.von.burgsdorff@luther-lawfirm.com

Luisa Kramer

Luther Lawfirm, Hamburg

luisa.kramer@luther-lawfirm.com

The supply chain is currently encountering many challenges. Materials and building supplies are scarce due to past and ongoing crises such as the Covid-19 pandemic, wars and increased costs. In addition, staff shortages are also now particularly acute.

This makes it all the more important to provide assistance to old and new supply chain challenges in the healthcare and life science sector through the use of new technologies, and to make the supply chain more effective and fail-safe through Artificial Intelligence (AI). Intelligent workflows have long supported supply chain managers in optimising costs and stabilising the supply chain. By using AI, a digital supply chain can be developed which automatically responds accordingly, depending on the control unit entered. If the inventory is monitored by AI, it can perform a so-called automatic ‘predictive ordering’. The AI automatically determines a material requirement if the inventory falls below a previously defined critical value. The AI uses networked databases to check prices, delivery terms, general terms and conditions, and submits an order to another AI, which in turn checks the order as well as its own inventory and production capacity. If the capacity covers the order, then it is confirmed by the AI.

The digital supply chain can also be elevated into the Metaverse through further use of AI. ‘Predictive maintenance’ is used by monitoring the performance and condition of equipment and assets to reduce likelihood of failure.

Nevertheless, the increasing use of AI still involves a need for regulation to determine the exact legal framework. Who concludes the contract in the case of automated material ordering between two AI? Does the AI have legal capacity as an ‘e-person’? What is the content of the contract? The AI does not weigh up divergences in the contract’s content, such as within different general terms and conditions of the customer and supplier, as a lawyer would do. What happens if the AI makes incorrect declarations due to a technical defect or incorrect programming?

The European Union (EU) wants to counteract this risk, which is still unacceptable in some cases, within AI systems by means of an AI law. Above all, the European Parliament wants to ensure that AI systems used in the EU are safe, transparent, traceable, non-discriminatory and environmentally friendly. AI systems should be overseen by humans, not automation, to prevent harmful outcomes. The Parliament also wants to establish a technology-neutral, single definition for AI which could be applied to future AI systems. 

This would allow the legal issues raised above to be embedded in a legal framework, where appropriate, to ensure legal certainty. On 14 June 2023, members of the European Parliament adopted their negotiating position on the AI law. Discussions will now begin with EU Member States in the EU Council on its final wording. The aim is to reach an agreement by the end of 2023.

It remains to be seen whether the AI systems within the supply chain, which can be used quite sensibly, are capable of managing the challenges in the healthcare and life science sector.