The advancement of supply chain planning with GenAI  

While it can be a useful ally in the supply chain, technology is only one aspect of the digital strategy. 


By Jan Snoeckx, Gartner Supply Chain’s director of analysis

Supply chain planning (SCP) has a very low digital acceptance rate; only 15% of planning businesses surveyed said their adoption rates were higher than 75%, according to research from Gartner. Furthermore, almost 50% of respondents admitted to at least one unsuccessful attempt at putting digital planning into practice. Even with large sums of money being spent on SCP transformation initiatives, many businesses nowadays are not making the most of their technological resources.


In the past, businesses have placed a more priority on perfecting the algorithms in SCP systems, focusing on computations and end-to-end supply and demand balance. Although this is significant, user experience (UX) has been overlooked. As a result, user adoption has decreased and enterprises’ acquired value has decreased.


However, there is beginning to be some movement in the SCP technology market as UX is receiving more attention. This is partly due to architecture improvements that incorporate native Web user interface (UI) technologies. Now, the increased emphasis on UX is being accelerated by generative AI, or GenAI.


Because of the focus and financial support from technology companies, artificial intelligence (AI) is rapidly expanding on a number of Gartner hype cycles, including the most current 2024 Hype Cycle for Supply Chain Planning Technologies. But in addition to tech companies making investments, other businesses are also considering how to use GenAI throughout their entire enterprise.


There is much promise for supply chain planning using GenAI. It can be applied to increase productivity in a wide range of situations and use cases, such as:

Strategy development: 

Developing unique communication and presentation materials for a range of audiences, from front-line staff to upper management.

Summarization: 

Create summaries of legislative, including environmental, social, and governance (ESG) requirements that may have an impact on parts of SCP, and strategic decisions made by other enterprise functions to inform planning decisions.

Material classification: 

GenAI can distinguish between supply chain alerts, insights, decision suggestions, and forecasts that are less critical and more critical, all of which can influence planning operations that look ahead.


Even if GenAI has a lot of promise, SCP technology providers need to avoid the urge to concentrate too much innovation in one area. Numerous additional aspects need to be given top priority, including having a consistent data model, robust and understandable analytics, the ability to design scenarios, and a flexible, user-friendly interface.


Leaders in supply chain planning should also refrain from viewing GenAI as a “digital assistant.” That is how a lot of technology vendors currently categorize their products, however this is an overly limited perspective. In order to fully benefit from this new technology, we need to see GenAI as a partner on par with planners, collaborating side by side to produce higher-quality planning decisions and results.


Excellent illustrations of this collaboration model are situations in which bi-directional learning can be used. Consider a GenAI agent answering production planner’s questions to plan the distribution of finished goods, for example. With time, the production planner will be able to better match deployment constraints with production orders, and the GenAI agent will learn from the queries and choices the planner makes.


You might ask if GenAI is something your company ought to prioritize. Yes, is the straightforward response. But the more crucial query to think about is: Can supply chain planning be saved by GenAI? Here, the answer is most likely not

Particularly in the UX domain, we need to continuously pushing the boundaries and coming up with innovative applications for GenAI. To advance in crucial areas, we shouldn’t, however, sacrifice too much for other crucial instruments that equally need our attention and financial support. Because they can appear like attractive methods to cut corners, which is indeed alluring in this fast-paced society, it’s quite simple to become enthralled with new, shiny goods.

Though not at the expense of all the other technologies we also need to adopt, GenAI can be a potent SCP partner. This revolutionary technology has enormous potential. Adopting GenAI should be a component of your digital strategy, not your only one, and you should think about its specific applications for your company as you would with any new technology.

To find out more about this subject and other supply chain planning trends, join Gartner experts and leaders in the field on December 3–4 in Denver, Colorado, at the Gartner Supply Chain Planning Summit.


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