Half of Supply Chain  to Implement GenAI  This Year

Half of Supply Chain to Implement GenAI This Year

Jan. 16, 2024
Gartner survey says companies will allocate 5.8% of their budgets to the technology.

With the growing capability of AI, half of supply chain leaders plan to implement generative AI (GenAI) in the next 12 months, according to a survey from Gartner, Inc.

An additional 14% is already in the implementation stage. Nearly two-thirds of respondents plan to, or are already in the process of, implementing the technology, with just 2% of respondents having no plans to do so over the next year.

The survey data also showed that chief supply chain officers (CSCOs) are dedicating 5.8% of their function’s budget, on average, to GenAI.

“CSCOs see GenAI as supportive of their broader digital transformation objectives,” said Noha Tohamy, distinguished VP analyst in Gartner's Supply Chain Practice. “Many supply chain leaders were already leveraging supply chain technologies and advanced analytics, and it’s clear from this data that the majority also see the value in GenAI to enhance productivity, improve business agility and reduce costs. The challenge for many of these organizations over the next 12 months will be in scaling their pilot projects to broader adoption,” said Tohamy.

Tohamy noted, however, that the survey responses show that supply chain lags other enterprise functions, like marketing and sales, in adoption. This could present an opportunity for supply chain organizations to be “fast followers” by capitalizing on early learnings and technology investments from other functional partners. The survey data showed that the most impactful supply chain use cases for GenAI include areas such as code augmentation, providing more insights into supply chain key performance indicators and staff assistance chatbots.

The survey also showed that supply chain leaders are backing up their implementation plans with significant budget allocations. Supply chain leaders will allocate 5.8% of their budgets to the technology, as well as incremental employee spend to deploy GenAI. Sixty-five percent of respondents said they will hire dedicated staff and experts to help deploy the technology in 2024.

Tohamy said that the projected budget data shows that supply chain leaders are serious about making progress on GenAI solutions this year and that they also recognize the need for additional resources to successfully move beyond small-scale pilots. “CSCOs may also be factoring in impacts on employee roles required of their staff as they shift to higher value-add activities, while lower-level tasks are increasingly automated,” said Tohamy.

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