Gartner: High-performing supply chains more likely to use AI

There is a clear statistical relationship between a supply chain organization’s embrace of artificial intelligence (AI) and its likelihood of being successful.

According to a new survey of more than 800 supply chain practitioners across geographies and industries from Gartner Inc., top performing supply chain organizations are investing in artificial intelligence and machine learning (AI/ML) to optimize their processes at more than twice the rate of low performing peers.

The survey examined the top five processes utilizing supply chain data to automate and/or optimize decisions using AI and/or ML, with percentages of high performing and lower performing respondents participating:

• Demand forecasting (40% high performers/19% lower performers).
• Order management and fulfillment (33%/8%).
• Supply planning (31%/12%).
• Logistics and distribution (27%/8%).
• Sales and operations planning/integrated business planning (24%/10%).

Among the top five digital investments expected to deliver value, high performers are farther along in implementation across the board. These include (high performing vs. low performing organizations):

• Partner with IT to establish unbreachable data security mechanisms (74% vs. 61%).
• Create ethical and binding data privacy frameworks for use of customer data (68% vs. 50%).
• Write cybersecurity measures into supplier and staff contracts (66% vs. 57%).
• Capture supply chain specific customer satisfaction data (58% vs. 40%).
• Analyze and leverage supply chain specific customer use and satisfaction data (57% vs. 35%).

The survey also revealed that top performing respondents are more likely to use productivity, rather than efficiency or cost savings, as their key focus to sustain business momentum over the next three years. 

And when managing resource investments, top performing respondents were generally ahead in collaborating with suppliers to maintain supplier consistency and working exclusively with suppliers that have their own risk controls.

[Read more: Gartner: Artificial intelligence will spread in supply chain]

“Top performing supply chain organizations make investment decisions with a different lens than their lower performing peers,” said Ken Chadwick, VP analyst in Gartner’s Supply Chain Practice. “Enhancing productivity is the key factor that will drive future success and the key to unlocking that productivity lies in leveraging intangible assets. We see this divide especially in the digital domain where the best organizations are far ahead in optimizing their supply chain data with AI/ML applications to unlock value.”

Gartner surveyed 818 supply chain practitioners from August through October 2023. “High performers” were those reporting performance that exceeded expectations over the last 12 months across the five measurements in supply chain outcomes – perfect order rate, supply chain costs, order fill rate, cash-to-cash cycle time and inventory turnover.