High-performing supply chains leverage AI/ML for superior results: Gartner

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 their low-performing peers, according to the latest survey carried out by Gartner Inc.

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 the 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 revealed that high-performing respondents prioritize productivity over efficiency or cost savings to maintain business momentum in the next three years. Top-performing respondents generally collaborated with suppliers to maintain consistency and worked exclusively with suppliers with risk controls when managing resource investments.

“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 and ML applications to unlock value.”

Gartner surveyed 818 supply chain practitioners from August through October 2023. High performers were those who reported exceeding expectations in the last 12 months in five supply chain outcome metrics: perfect order rate, supply chain costs, order fill rate, cash-to-cash cycle time, and inventory turnover.

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