Half of supply chain leaders plan to implement generative AI (GenAI) in the next 12 months, with an additional 14% already in the implementation stage , according to a survey by Gartner, Inc.

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.”

Gartner surveyed 127 leaders  from the industry in November 2023 on their plans to utilise GenAI within their function for 2024. 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 responses seem promising for AI adoption, but notably lag behind other enterprise functions, like marketing and sales, in adoption.

This could present an opportunity for supply chain organisations to establish themselves as “fast followers” by capitalising on early learnings and technology investments from other functional partners.

On the other hand, supply chain leaders may be more cautious in adopting emerging technology as their security and functionality concerns may be greater than other enterprises uses cases with less high stakes, like advertisement.

The survey data did also show 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.

Recommended reading

• Supply Chain Vulnerability Grows in Q2 Cyber-threat Report
• Supply Chain Productivity Decline Cannot be Solved by Tech Alone
• How Can Digital Tech Help Combat UK Supply Chain Challenges?

Supply chain leaders are also backing up their implementation plans with significant budget allocations – they’ve pledged 5.8% of their budgets to the technology, as well as to incremental employee spend to deploy GenAI.

Nearly two thirds (65%) of respondents said the 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.

The introduction of new technologies, however, is not the only thing supply chain leaders need to be concerned about, according to an earlier Gartner study.

The workforce is disengaged, their survey from June found, with showed that turnover in the industry was a third higher than pre-pandemic levels.

People management will therefore also be integral to the adoption of any new technologies in order to ensure the success of any digital transformation efforts.