AI leads the way in supply chain technology, survey shows

Artificial intelligence will help reshape the supply chain in the year ahead, according to a survey by supply chain technology firm JDA Software, Inc. and consulting company KPMG LLP, released this week.

The companies' second annual joint survey of supply chain executives found that end-to-end visibility continues to be the top priority across retail, manufacturing, and logistics operations and that it is driving digital supply chain investments powered by artificial intelligence (AI), machine learning (ML), and cognitive analytics.

The survey showed that supply chain traceability and visibility continues to be the highest investment area for supply chain executives (77 percent), and that to achieve it, executives plan to deploy or test cognitive analytics (82 percent), AI/ML (62 percent), or digital control tower (55 percent) technology in the next 24 months. In addition, respondents said that together, AI/ML technologies are viewed as "the most impactful technology this year" (80 percent) given their wide applicability and promise of addressing complex business problems across the value chain, the survey showed.

Cognitive/predictive analytics also ranked high, with 75 percent of respondents saying it will have a disruptive effect in the year ahead, according to the survey. Overall, since last year, AI has shifted into the high impact/high planned adoption quadrant for surveyed executives, "confirming the importance of the impact this technology will have on supply chains in the year ahead," survey authors said.

A closer look showed that organizations value AI/ML technologies for their ability to optimize inventory (51 percent) followed by predictive distribution (45 percent) and optimizing distribution networks (42 percent). Respondents said the highest value for AI technologies, in particular, are:

• Increasing inventory and pricing accuracy for retail;
• Improving demand forecasting for manufacturing;
• Optimizing distribution networks for logistics.

Despite the interest in AI and other new technologies, roadblocks to adoption still exist, the survey also found. More than 40 percent of respondents listed "resistance to change" as the number one challenge to driving innovation in their organization. Survey authors noted that the inability to assess the potential of new technology has risen over the last year, indicating a disconnect between technology hype and technology value among many executives. Companies that have a "proven value delivery track record" in the AI/ML space will have an advantage over their competition, the survey found.

The JDA/KPMG Digital Supply Chain Investment Survey was conducted by management consulting firm Incisv earlier this year.