**London**: A new report reveals that while supply chain leaders are optimistic about AI’s potential to optimise operations and enhance supplier relationships, significant barriers such as data fragmentation and security concerns pose challenges to effective implementation across the industry.
As U.S. supply chain leaders navigate increasingly complex operating environments, a recent report underscores both the optimism and the challenges associated with implementing artificial intelligence (AI) in supplier relationship management (SRM). The findings, released by FourKites in its report titled “Why You Should Rethink Your Supply Chain Tech,” reveal that while many are hopeful about AI’s role in automating routine tasks, significant barriers persist.
In collaboration with the research group YouGov, FourKites surveyed 250 supply chain leaders to gauge the effectiveness of current solutions and their readiness for emerging technologies. A key concern identified by respondents is the overwhelming number of systems required for operational decision-making; approximately 75% reported using between three to ten disparate systems. This fragmented approach often leads to blind spots in the supply chain and inadequate real-time insights, with merely 20% able to access up to 75% of their data instantaneously.
Optimism regarding AI’s potential to enhance supply chain efficiency was prevalent among leaders, particularly in areas like carrier communications, appointment scheduling, and exception management. Many believe that AI could significantly improve operational performance, particularly on metrics such as on-time, in-full (OTIF) deliveries, and customer satisfaction, while also potentially reducing labour costs. However, concerns regarding data security, system reliability, and implementation costs were echoed by more than 40% of the respondents, reflecting a cautious approach to adopting new technologies.
The report highlighted several critical findings:
- Blind spots in supply chain visibility were cited as a primary limitation by 38% of respondents, rising to 58% among larger organisations.
- Eight out of ten respondents reported having less than 75% real-time access to their supply chain data.
- Approximately 30% of larger firms acknowledged that complicated workflows inhibit their ability to extract value from existing technology.
- Understanding the implications of supply chain disruptions remains a time-consuming process; two-thirds of leaders indicated it takes four hours or longer.
- Despite the enthusiasm for AI, only 22% of companies with revenue exceeding $1 billion felt their supply chain control mechanisms were highly effective at prompting actionable insights.
Mathew Elenjickal, founder and CEO of FourKites, remarked on the state of the supply chain sector, stating, “Companies in every industry are telling us the same thing: they’re drowning in data but starving for action.” He emphasised that a consolidation of systems to create a “single source of truth” could empower better decision-making and ultimately mitigate network delays, which significantly contribute to unexpected costs in supply chain management.
The report further advocates for the adoption of integrated solutions, such as the FourKites® Intelligent Control Tower™, which employs AI to transform fragmented data into coordinated actions. By using advanced systems to create digital representations of shipments and inventory, companies could gain crucial insights and enhance their responsiveness to supply chain challenges.
Overall, while the potential of generative AI in SRM offers a promising path to streamlining operations and improving relationships with suppliers, it is clear that addressing existing barriers will be crucial for unlocking its full benefits in the supply chain sector.
Source: Noah Wire Services
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