CGI: AI Already a Key Area of Focus for Supply Chain Leaders

Amid geopolitical tension, economic uncertainty and extreme weather events, the resilience of supply chains around the world is being put to the test on a daily basis.

Meanwhile, industry leaders are tasked with managing complex supplier networks, enhancing transparency to showcase sustainability credentials and developing data-driven strategies to quickly meet customer demands. 

In a bid to understand the biggest challenges facing today’s supply chain executives, as well as their key motivations and goals, CGI commissioned Supply Chain Digital and sister title Manufacturing Digital to gather the thoughts of dozens of experienced professionals. 

Perhaps unsurprisingly, the results reveal that artificial intelligence (AI) is already a key area of focus for leaders as they look to successfully navigate this ongoing period of uncertainty. 

Striving for resilience

Resilience and risk management have always been supply chain staples, but their perceived importance has been amplified following a series of major events with far-reaching impacts – beginning with the COVID-19 pandemic. 

Leaders said being data-driven – encompassing visibility, transparency and traceability – was the top attribute (87.4%) of a resilient supply chain, followed by agility and flexibility (78.2%) and predictive/real-time scenario planning (55.2%). 

Interestingly, local production, ESG and security were considered to be less pivotal factors when it comes to resilience. 

Scoring their own supply chains out of 10 in relation to these same factors, executives were relatively confident in their security and data-driven pedigree, scoring them an average of 6.7 and 6.57 respectively. 

However, they were less sure of their carbon neutrality and ESG credentials, settling on an average score of 5.13. 

Operational efficiency key to achieving KPIs

Elsewhere, leaders were asked for their top three KPIs for their companies’ supply chains. 

Three indicators emerged as clear frontrunners:

• Delivery time/cash-to-cash time cycle: 83.9%
• Customer satisfaction: 77%
• Inventory turnover and velocity: 60.9%

Gross ROI in relation to supply chain technology, carbon footprint and claims were regarded by executives as being less reflective of overall company performance. 

Almost three-quarters (73.6%) of respondents highlighted operational efficiency as the biggest obstacle to achieving their KPIs and goals. This was closely followed by organisation (71.3%), inclusive of business and IT alignment, a lack of skilled employees and internal culture. 

At the other end of the scale, less than a quarter (23%) said regulations were proving problematic to meeting objectives. 

AI a key focus for supply chain leaders

Looking to the future, it’s evident emerging technologies like AI are set to become a primary focus for supply chain leaders – if they haven't already.

Asked which technologies will support their supply chain initiatives over the next couple of years, more than two-thirds (69%) of executives opted for AI, advanced analytics and digital twins. 

This was followed by:

• Advanced planning system including integrated business planning: 65.5%
• ERP/digital manufacturing cloud: 56.3%
• Intelligent automation: 54%

This serves as clear evidence that AI is perceived by decision-makers as a key enabler of innovation and growth.

Moreover, intelligent scenario planning incorporating AI and real-time decision making was chosen as a top focus area (67.8%) for the next five years, as was L&D and attracting talent (60.9%).

Despite giving their own supply chains relatively low scores for their carbon neutrality and ESG credentials, more than half (55.2%) of the survey respondents said sustainability and reducing carbon emissions would be a top priority moving forward. 

What’s telling, however – especially given the last few years of disruption and uncertainty – is the level of confidence among supply chain leaders in relation to their future preparedness.

A significant majority (82.8%) of professionals claimed they were either ‘ready’ or ‘somewhat ready’ for the future, with an additional 5.7% going as far as to say they are ‘leading the way’.

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