Lack of Formal AI Strategy Limits Supply Chain Progress
Only about one in four supply chain executives have a formal AI strategy, according to recent research from Gartner. This absence of clear planning is a key factor holding companies back from unlocking AI’s full potential in supply chain management.
While AI adoption in supply chains is growing, many organizations rely on ad hoc approaches rather than documented strategies. Gartner's survey of 120 global supply chain leaders found that just 23% have a defined AI strategy, with around 40% operating without one or using informal plans.
The Cost of Short-Term Focus
Without a formal strategy, organizations tend to focus on quick AI wins, such as immediate cost savings or process improvements. This emphasis can create an artificial ceiling on the value AI can deliver, limiting its use for broader, more strategic goals like revenue growth or product innovation.
Senior leaders often pressure chief supply chain officers (CSCOs) to demonstrate rapid returns. Over half of respondents reported intense expectations to integrate AI tools quickly, and 59% said they must show ROI within a year of investment. While short-term gains are important, AI’s real advantage lies in enabling strategic initiatives that drive long-term value.
For example, AI can inform new product development by analyzing customer preferences and trends, helping companies personalize offerings. A formal AI strategy helps CSCOs position supply chains as strategic assets, securing a stronger voice in organizational decision-making and enabling transformation at scale.
Lessons from Past Technology Hype
The current lack of AI strategy echoes the challenges faced with earlier emerging technologies like IoT and blockchain. However, AI offers more tangible opportunities compared to those technologies, which often struggled to deliver clear use cases.
Despite this potential, hype can be a barrier. Many supply chain leaders feel pressured to launch AI pilots and proofs of concept without a clear end goal or foundational plan. This scattershot approach risks wasting resources and missing strategic benefits.
Building a Strong Foundation for AI
Successful AI implementation requires more than just enthusiasm. Foundational elements such as governance, security, and architecture are crucial to support scalable AI transformation. Leadership ownership and enterprise-wide coordination are essential to avoid running in circles with fragmented efforts.
Research from IDC highlights additional hurdles like high costs, integration challenges, talent shortages, distrust in AI decisions, and resistance from traditional stakeholders. Vendors like SAP and O9 Solutions are responding by embedding governance tools directly into AI software, simplifying adoption.
However, companies developing advanced AI capabilities like generative or agentic AI internally face significant risks without proper strategy and safeguards.
User Adoption Determines Success
AI tools must prove their value on the ground. Factory workers, planners, and warehouse operators care only about whether these tools make their jobs easier and more efficient. Usability and practical impact are the ultimate measures of success.
The comparison between AI and previous technologies like blockchain is instructive. Blockchain’s failure to produce widespread supply chain impact was due to unclear use cases. AI stands apart because its applications and value are much more evident and achievable.
Final Thoughts for Supply Chain Executives
To maximize AI’s benefits, supply chain leaders should:
- Develop and document a clear AI strategy aligned with both short-term and long-term business objectives.
- Ensure foundational elements—governance, security, architecture—are in place before scaling AI initiatives.
- Balance quick ROI projects with strategic initiatives that leverage AI for innovation and growth.
- Focus on user experience to drive adoption and effectiveness of AI tools on the ground.
For executives looking to build AI knowledge and skills that support strategic supply chain transformation, exploring comprehensive AI training resources can be a valuable step. Consider reviewing the latest AI courses designed for business leaders and strategists.
Your membership also unlocks:
