Gartner: half of supply chain organizations want to implement GenAI this year

Half of supply chain leaders plan to implement generative AI (GenAI) in the next 12 months. A further 14% are already in the implementation phase, according to research from analyst firm Gartner. The data further shows that chief supply chain officers (CSCOs) spend an average of 5.8% of their budget on GenAI.

“CSCOs see GenAI as supporting their broader digital transformation goals,” says Noha Tohamy, Distinguished VP Analyst at Gartner. Gartner surveyed a total of 127 supply chain leaders in November 2023 about their plans to adopt GenAI this year. Almost two-thirds of respondents revealed that they plan to implement the technology or are already in the process of doing so. Only 2% have no plans to do so in the coming year.

Scaling up pilot projects

“Many supply chain leaders were already using supply chain technologies and advanced analytics, and this data clearly shows that the majority also see the value of GenAI to increase productivity, improve business agility and reduce costs. The challenge for many of these organizations over the next 12 months will be to scale up their pilot projects to wider adoption,” Tohamy comments.

However, she adds that the survey shows that supply chain lags behind marketing and sales, for example, in terms of GenAI adoption. This offers supply chain organizations the opportunity to become ‘fast followers’, by taking advantage of early lessons learned and technology investments made by others. The most impactful supply chain use cases for GenAI include generating additional software codes, providing greater insight into key supply chain performance indicators, and chatbots to assist employees.

Sizable budget allocations

The survey also found that supply chain leaders are supporting their implementation plans with sizable budgets. They said they plan to allocate 5.8% of their budget to the technology, as well as additional labour expenses to implement GenAI. Moreover, 65% of respondents said they will hire dedicated staff and experts to implement the technology before the end of this year.

According to Tohamy, the forecast budget data shows that supply chain leaders are serious about moving forward with GenAI solutions this year. They also recognize the need for additional resources to enable them to move beyond the small-scale pilot phase. “CSCOs may also be considering the impact on the roles their employees are required to perform, because they are shifting to higher value-added activities while lower-level tasks are increasingly automated,” Tohamy says.