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Logistics KPIs Will be Supported by GenAI

Logistics KPIs Will be Supported by GenAI

March 18, 2024
Gartner survey shows this technology will be in full use by 2028.

GenAI is going to make great strides in the very near future. By 2028, 25% of all logistics key performance indicator (KPI) reporting will be powered by generative AI (GenAI), according to analyst firm Gartner Inc.

“GenAI presents an opportunity for logistics leaders to uncover additional insights from logistics data and drive operational efficiency,” said Carly West, senior director analyst in Gartner's Supply Chain practice, in a statement. “KPI reporting is a challenging area for many organizations, and it is ripe for exploration with GenAI to uncover valuable findings from logistics data at a greater speed.”

According to a Gartner survey of 127 supply chain leaders, conducted in November 2023, the shift towards leveraging GenAI in supply chain and logistics is underway with half of leaders surveyed planning to implement GenAI in the next 12 months, with an additional 14% already in the implementation stage.

One of the issues in creating strong KPI, is the difficulty of accessing data sources. This is further complicated as many companies still manually review documents, correspondence and transcripts. 

GenAI’s ability to use natural language processing to query and display KPIs enables logistics leaders to quickly summarize multiple data sources to draft scorecards, while also enabling prompts to present and explain results, conduct root cause analysis and analyze supplier data to evaluate performance.

“The ability to gather and consolidate different data sources will remove obstacles that logistics leaders currently run into,” added West. “Moreover, the ability to understand where challenges are occurring in real time will enable faster corrective action to improve logistics performance, in turn driving operational and financial results.”

Understanding Organizational Readiness and Demonstrating Value

As logistics leaders consider where GenAI can support KPI reporting, it will be critical to assess their organization’s level of maturity, culture, internal capability and data and talent availability prior to implementation.

“As with any new technology, evaluating your organization’s readiness prior to beginning implementation is key,” said  Jose Reyes, senior director analyst in Gartner’s Supply Chain practice, in a statement. “Reviewing your existing technology stack and establishing the right KPIs before exploring how GenAI can help is important for maximizing value.”

It’s also important to consider how and when logistics leaders will demonstrate value to leadership. Taking advantage of KPI reporting through embedded options in solutions or technology already used by the organization will drive quicker wins. As GenAI matures, logistics leaders may be able to build these models on top of their internal datasets, making queries for KPI metrics and reporting easier and more robust and accurate.