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,” said Tohamy.
Gartner surveyed 127 supply chain leaders in November 2023 on their plans to utilize 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 (see Figure 1).
Figure 1: Supply Chain Leaders’ GenAI Utilization Plans
Source: Gartner (January 2024)
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.
