Shekar Natarajan is the founder and CEO of Orchestro.AI.
For decades, supply chains have relied on fixed infrastructure—private networks, dedicated fleets and siloed distribution centers—because they were designed for predictable operations over many years. But in today’s supply chain operations, predictability has become the exception rather than the rule. With fluctuating markets, increased consumer demand and political upheaval, volatility is the new normal. The systems that used to provide stability now create liability.
We need to develop new strategies for constructing, linking together and managing supply chains. An open network model, powered by AI, makes a promising new paradigm.
Why Open Networks Make Sense
Supply chains are deeply complex, and no two systems are alike. This makes coordination an ongoing challenge, making a company’s ability to adapt to dynamic changes clunky and slow. Open networks, on the other hand, provide agility and variability crucial in today’s rapidly changing business landscape. A hybrid approach, combining human expertise, AI, and recursive learning is the key to trustworthy and efficient open networks. But enabling that kind of collaboration across players with different systems, incentives and priorities isn’t easy. There are four major challenges that need to be solved:
1. Harmonization
Everyone in the supply chain speaks a different language. Where one carrier might use 150 tracking codes, another uses only 10. Some rely on in-house labor, others use contractors or gig workers. Technologies, taxonomies, cost structures and service models all vary. Bringing these elements together—without forcing everyone to adopt a single standard—is a monumental task.
2. Coordination At Scale
As more parties join a network, communication complexity increases exponentially. Think of two people having a conversation: it’s one direct line of communication. Add two more people and suddenly it becomes six lines of communication. Add another two or 12 or two hundred and it gets exponentially more complicated. When you start coordinating across different legs of the supply chain—first mile, middle mile, last mile—and factor in multiple zones and service levels, the complexity quickly becomes overwhelming.
3. Security And Trust
Data sharing across businesses is sensitive territory. Business leaders often worry that sharing operational data will expose competitive insights. But keeping information siloed can lead to bigger issues—like fraud or disruptions that ripple through the network unnoticed. Without transparency, problems repeat. With it, networks get smarter.
4. Misaligned Incentives
Each link in a supply chain is naturally incentivized to optimize for its own outcomes. This behavior is amplified when power imbalances exist. The big players tend to dictate and the small players must react to keep up. During the pandemic, for example, some delivery companies hoarded capacity or charged premium access, leaving others stuck. Open networks only work when incentives are structured to prioritize collective performance.
AI As Enabler
Artificial intelligence (AI)—especially large language models and advanced pattern recognition tools—is opening new possibilities for solving these long-standing problems.
Using techniques like fuzzy logic and named entity recognition (NER) to match fields and terminology, AI can interpret, reconcile and build upon differences between systems. For example, one company may refer to a “ship ID” and another to an “order ID”—AI can determine that they refer to the same object. This allows for faster, more flexible integrations, even for systems that were never designed to work together.
AI can help companies connect systems quickly, eliminating months-long onboarding and integration cycles. More importantly, AI can dynamically identify and resolve issues across networks, with no manual intervention needed.
A hybrid model works best: humans in the loop to handle ambiguity, experts to reduce bias and AI to learn and scale those patterns over time. The result is a network that gets smarter with every transaction.
Data Sharing Without Risk
Security and trust remain critical hurdles. A feasible approach entails anonymizing data exchanges which lets participants maintain anonymity while accessing collective insights. Companies that analyze broad network trends instead of local details can make informed decisions while maintaining their competitive advantage.
Selective participation also plays a role. Companies have the freedom to decide both their data sharing level and the capacity they dedicate. As organizations start realizing tangible benefits including cost reductions and improved coordination, they tend to become more actively involved. As trust develops step by step the network becomes stronger.
Better Together
A critical mass of smaller, agile players working together can unlock network effects that rival or exceed what any one large player can offer alone. In fact, some of the more forward-thinking global players are already adopting open principles because they see the long-term value in adaptability over control.
For those who choose to stay siloed, the tradeoffs are clear: higher costs, slower responsiveness and missed opportunities. In time, fragmentation becomes its own disadvantage.
Strategy Must Match The Speed Of Change
One of the greatest challenges in business today is the shrinking lifespan of strategic context. A plan that made sense six months ago might be outdated today. The pace of change—in consumer behavior, geopolitical risk, technology and market demand—is accelerating.
Decisions used to be measured over decades. Now, businesses can go from hero to cautionary tale in a matter of weeks. The fixed infrastructure decisions that once offered stability now introduce fragility.
Building agility into your network is no longer optional—it’s essential. This isn’t just theory—it’s part of a broader trend we’re already seeing in other domains. The internet, open-source software (like Linux), India’s Unified Payments Interface (UPI) and the ONDC digital commerce network are proof that open systems can scale and succeed at national and even global levels.
What the internet did for communication, open networks will do for supply chains.
The companies that embrace this shift won’t just survive—they’ll lead. AI-first, open infrastructure will be the foundation of the next generation of commerce. And the organizations that align their systems and incentives to that reality will be the ones that thrive in a future defined by speed, complexity and continuous change.
Because in a world that refuses to sit still, agility is your most valuable asset.
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