Supply chain teams have lagged behind their counterparts in marketing and customer service in adopting generative artificial intelligence in their organizations. But that could be starting to change.
Half of supply chain leaders plan to implement generative artificial intelligence in their organizations in the next 12 months, while only 2% have no plans to deploy the technology in the foreseeable future, according to a Gartner survey.
“Supply chain leaders are looking at being fast followers” behind their peers in other functions, Noha Tohamy, distinguished VP analyst in Gartner’s supply chain practice, said in an interview.
Some of the top generative AI uses in supply chain include chatbots to assist staff, code generation, interfacing with other technology solutions, onboarding of new hires, and discovery and diagnostics of key performance indicators.
Tohamy suggested the technology could be of particular help in processing complex data or technological solutions and providing answers to questions posed by staff in natural language. In that respect, it can help increase the return on investment of other technological adoptions by honing in on relevant threads, according to Tohamy.
“It’s not just a time saver, it’s a frustration remover. If I’m a supply chain planner, I’m spending 70% of my time looking at dozens of Excel sheets and tracking down data,” she said. “If you eliminate the time trying to get insights, and give planners more time to make better decisions and cooperate with others in the organization … it’s a force multiplier.”
When supply chain leaders report the expected benefits of AI, top among them is increased productivity, with 46% of respondents listing it as a benefit, according to a Gartner presentation on the survey. Following it are business agility, cost reductions, digital transformation efforts and improved profitability.
In procurement, anticipated investment in generative AI is slightly behind the supply chain function but still substantial, with 43% of leaders actively planning to implement the technology within 12 months, according to Gartner.
Top uses include sourcing and contract lifecycle management, supplier information discovery and management, supplier communications, chatbots for sourcing advisory desks, and summarization of proposal reviews, per the survey results.
For procurement analysts, generative AI might be able to explain in intuitive terms the top suppliers in a product category, while for suppliers it can surface past performance levels with specific customers and explain business risks in not performing at a given service level, Tohamy said.
Both supply chain and procurement leaders anticipate generative AI to lead directly to staff reductions in the coming years. Supply chain leaders expect headcount to shrink 10.4% by 2026 while their counterparts in procurement plan for a 6.6% reduction.
Those expectations around headcount cuts may be “overly ambitious,” Tohamy said, given that the supply chain organizations are just beginning to adopt and deploy generative AI.