Deployment of GenAI creates productivity paradox

Deploying Generative AI (GenAI) leads to a productivity paradox if the improvements achieved for individual office workers are accompanied by more frictions in the working environment. This is according to new research by analyst firm Gartner on the impact of GenAI in supply chain organisations.

GenAI is now deployed by 72% of supply chain organisations. However, most experience mediocre results in terms of productivity and Return on Investment (ROI), Gartner concludes. Indeed, productivity gains from using GenAI for individual office workers do not translate to higher productivity at the team level. Moreover, the deployment of GenAI tools leads to increased anxiety among many employees, which depresses their productivity.

Chief Supply Chain Officers (CSCOs) deploying GenAI should therefore focus not only on efficiency, but on a strategy that encompasses the entire productivity of the organisation. This strategy should better engage frontline employees (staff in factory, warehouse and shop, ed.), address growing concerns about the use of GenAI tools and focus on use cases that foster creativity and innovation, rather than just time savings.

Productivity paradox

‘Early GenAI implementations within the supply chain reveal a productivity paradox,’ reports Sam Berndt, Senior Director at Gartner. ‘While its use has improved individual productivity for office functions, these gains are not shared at the team level. Also, the working environment in general is actually getting worse for many employees. CSCOs need to adjust their implementation strategies to address these negative outcomes.’

Gartner research results showed a productivity increase from GenAI for office workers: they saved 4.11 hours of time every week. That saved time also correlated with higher output and quality of work. However, these gains diminished when assessing team-level productivity. The amount of time saved dropped to 1.5 hours per team member per week and there was no correlation with improved output or higher quality of work (see figure below).

‘In their quest for efficiency and time savings, CSCOs can unintentionally create a downward spiral, constantly testing new GenAI tools. This increases employee anxiety, leading to lower productivity,’ Berndt said. ‘Instead of introducing more and more GenAI tools into the workplace, CSCOs should rethink their overall strategy.’

Shifting focus to organisational productivity

Gartner therefore advocates shifting from the current focus on individual productivity gains to an aligned approach to organisational productivity. Such an approach prioritises creativity-based use cases that improve strategic thinking and innovation across the workforce. Those use cases encourage employees to use GenAI tools to address their strategic tasks more thoughtfully, with an emphasis on those tasks that involve interactions with colleagues.

In this way, supply chain teams, for example, can gain a wide range of benefits beyond just time savings. Better overall productivity, for example (performing tasks better, not just faster) and the ability to identify a broader set of use cases than just time savings. In addition, upskilling employees should go beyond the isolated use of GenAI tools. Guidance on how to perform their new strategic tasks is also a must, according to Gartner.

Finally, according to the analyst firm’s researchers, the current focus on measuring automation should also be shifted to measuring innovation. In doing so, according to Gartner, the measurement criteria should be aligned with the application of GenAI in high-value tasks, new tasks created by GenAI and an orientation towards GenAI as a creator of jobs rather than an eliminator of them.