Analytics, AI seen as solutions to supply chain uncertainty

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by Emily Atkins

Operations managers are increasing investments in automation, AI and intelligent workflows, ecosystems and sustainability to help manage through the lasting effects of the pandemic.

A new IBM Institute for Business Value (IBV) study Own Your Transformation unveils how chief supply chain officers (CSCOs) are navigating significant supply chain challenges brought on by a global COVID-19 pandemic, inflation, climate change and geopolitical events, and how they plan to future-proof their supply chains.

“To effectively combat the unprecedented supply chain stressors like inflation, it’s imperative that CSCOs focus on using analytics, AI and automation initiatives to build intelligent, resilient, and sustainable supply chains,” said Jonathan Wright, IBM Consulting global managing partner, sustainability services and global business transformation.

“Automation and AI can enable CSCOs and their organizations to collect data, identify risk, validate documentation, and provide audit trails, even in high inflationary periods, while also managing their carbon, waste, energy and water consumption.”

The survey found that 47 percent of surveyed CSCOs said they have introduced new automation technologies in the last two years—an approach that can add predictability, flexibility, and intelligence to supply chain operations, and they’re using AI to help monitor and track performance.

Surveyed CSCOs rank sustainability as their third biggest challenge in the next few years, trailing only supply chain disruptions and technology infrastructure, and 52 percent place sustainability at or near the top of their priority list.

Half report that their sustainability investments will accelerate business growth. The most direct pressure for sustainability transparency comes from investors, at 56 percent, board members, 50 percent and customers 50 percent.

A fifth of respondents stand apart for accelerating their data-led innovation, and this group is already outperforming peers on key metrics including reporting 11 percent higher annual revenue growth.

This success is coming from integrating automated workflows across organizational functions and with their partners for real-time visibility, insights, and action (95 percent more than other CSCOs). They are also modernizing their technology infrastructure: 56 percent are currently operating on hybrid cloud, and 60 percent are investing in digital infrastructure.

Extending sustainability initiatives to create new products and services is seen by 58 percent as an opportunity to improve customer engagement.