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HomeThe CEO’s Guide to Generative AISupply chain
HomeThe CEO’s Guide to Generative AISupply chain
INSTANT INSIGHTS FUEL FASTER SUPPLY CHAIN INNOVATION
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* About this series
* Generative AI is unlike any technology that has come before. It’s swiftly
disrupting business and society, forcing leaders to rethink their
assumptions, plans, and strategies in real time.
* To help CEOs stay on top of the fast-shifting changes, the IBM Institute
for Business Value (IBM IBV) is releasing a series of targeted,
research-backed guides to generative AI, on topics from data cybersecurity
to tech investment strategy to customer experience.
* This is part nine: Supply chain.
Generative AI is unlike any technology that has come before. It’s swiftly
disrupting business and society, forcing leaders to rethink their assumptions,
plans, and strategies in real time.
To help CEOs stay on top of the fast-shifting changes, the IBM Institute for
Business Value (IBM IBV) is releasing a series of targeted, research-backed
guides to generative AI, on topics from data cybersecurity to tech investment
strategy to customer experience.
This is part nine: Supply chain.
Generative AI is unlike any technology that has come before. It’s swiftly
disrupting business and society, forcing leaders to rethink their assumptions,
plans, and strategies in real time.
To help CEOs stay on top of the fast-shifting changes, the IBM Institute for
Business Value (IBM IBV) is releasing a series of targeted, research-backed
guides to generative AI, on topics from data cybersecurity to tech investment
strategy to customer experience.
This is part nine: Supply chain.
Supply chain automation just got an upgrade
IF YOU COULD SEE THE FUTURE, WOULD YOU RUN YOUR BUSINESS DIFFERENTLY? THIS IS
THE QUESTION CEOS FACE IN THE ERA OF GENERATIVE AI—AND SUPPLY CHAIN AUTOMATION
HAS TAKEN IT OUT OF THE ABSTRACT. AS REAL-TIME DATA FUELS FASTER SIMULATION AND
MORE ACCURATE PREDICTIVE ANALYSIS, IT’S BECOME EASIER FOR BUSINESSES TO PLAN FOR
TOMORROW.
THAT’S WHY CEOS ARE RAPIDLY INVESTING IN GENERATIVE AI TO AUTOMATE AND
STREAMLINE THEIR SUPPLY CHAINS. IN FACT, 89% OF EXECUTIVES REPORT THAT KEY
INVESTMENTS IN AUTOMATION WILL INCLUDE GENERATIVE AI CAPABILITIES—AND 19% SAY
GENERATIVE AI WILL BE CRITICALLY IMPORTANT TO THEIR SUPPLY CHAIN AUTOMATION
FUTURES.
FOR SIX OUT OF 10 EXECUTIVES, THE BUSINESS CASE FOR INVESTING IN AUTOMATION
CENTERS AROUND BOOSTING WORKFORCE PRODUCTIVITY AND AGILITY—AND GENERATIVE AI
AMPLIFIES THESE EFFECTS FOR BOTH HUMAN EMPLOYEES AND AI ASSISTANTS. CLEAN AND
TRUSTED DATA WILL BE CENTRAL TO GETTING THE INTENDED VALUE FROM THESE
INVESTMENTS.
ORGANIZATIONS ARE SEIZING THE GENERATIVE AI MOMENT TO CAPTURE OPPORTUNITIES TO
INCREASE RESPONSIVENESS, BUILD DEEPER HUMAN-TECH PARTNERSHIPS, AND INNOVATE AT
CLOCK SPEED. THOSE THAT DON’T WILL BE STUCK IN THE CONTROL TOWER WONDERING WHY
THEY’VE FALLEN BEHIND.
The IBM Institute for Business Value has identified three things every leader
needs to know:
1. Real-time data is finally for real.
2. Seamless collaboration sparks productivity gains.
3. Generative AI is a mirror that lets you see around corners.
And three things every leader needs to do right now:
1. Stop fighting fires and start rethinking your supply chain.
2. Feed generative AI data that supports supply chain productivity.
3. Supercharge supply chain operating models with generative AI platforms.
Additional content
Report:
Download a brief overview of key recommendations from “The CEO’s guide to supply
chain”
Summary:
Download “The CEO’s guide to supply chain” and learn how CEOs stay on top of the
fast-shifting changes
--------------------------------------------------------------------------------
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Originally published 07 November 2023
1. Data
+ Generative AI
What you need to know
What you need to do
What you need to know
Real-time data is finally for real
AS DISRUPTION CONTINUES TO ROCK THE GLOBAL SUPPLY CHAIN, EXECUTIVES ARE HUNGRY
FOR A SINGLE SOURCE OF TRUTH. IN FACT, BEING ABLE TO RESPOND TO REAL-TIME DEMAND
VOLATILITY IS A TOP OPERATIONAL PRIORITY (51%) OVER THE NEXT THREE YEARS.
WITH GENERATIVE AI, THEY’LL FINALLY BE ABLE TO FEAST. IT CAN HELP LEADERS
COLLECT DATA FROM ACROSS THE SUPPLY CHAIN IN REAL TIME AND AVOID THE CONFUSION
THAT COMES FROM COMPETING VIEWS. RATHER THAN DEBATING WHOSE NUMBERS ARE RIGHT,
TEAMS CAN LOOK THROUGH THE SAME PANE OF GLASS TO MAKE FASTER DECISIONS—AND
ELEVATE THEIR ABILITY TO INNOVATE.
NEARLY TWO-THIRDS (62%) OF EXECUTIVES EXPECT GENERATIVE AI TO ACCELERATE THE
PACE OF DISCOVERY, LEADING TO NEW SOURCES OF PRODUCT AND SERVICE INNOVATION. AND
COMPANIES THAT GET IT RIGHT CAN GAIN A CRUCIAL ADVANTAGE: GENERATIVE AI LEADERS
OUTPERFORM IN INNOVATION 53% MORE FREQUENTLY THAN THEIR PEERS.
OF COURSE, REAL-TIME DATA WON’T JUST APPEAR ON THE DASHBOARD OVERNIGHT. TO TAP
INTO THIS INVALUABLE ASSET, CEOS NEED TO ADDRESS A HOST OF PRACTICAL AND
PRAGMATIC DATA ISSUES, FROM SEGMENTING AND CLEANING DATA TO DETERMINING HOW
STRUCTURED AND UNSTRUCTURED DATA SHOULD BE USED ACROSS THE ORGANIZATION.
WHAT YOU NEED TO DO
STOP FIGHTING FIRES AND START RETHINKING YOUR SUPPLY CHAIN
Enable innovation with real-time, data-driven insights. Pair these findings with
business know-how to deliver differentiated outcomes. Determine which data
should be centralized and what should be left at the edge or with third parties
to add the most value.
* Modernize your supply chain with advanced modeling. Take advantage of
generative AI’s uniqueness to modernize your supply chain applications and
architecture. Engage with quantum computing tools and methods to capitalize
on expanded modeling and optimization capabilities.
* Identify hidden pain points that are candidates for targeted innovation.
Encourage end-to-end experimentation in demand volatility, sourcing,
production, and distribution. Sponsor the integration of supply chain
communities that rely on predictive and prospective analysis fueled by
generative AI and huge amounts of data.
* Deploy your AI assistants into your supply chain ecosystem. Insert your
digital technology capabilities into your massive ecosystem of supply chain
partners. Bring a new level of synergy and efficiency by exchanging those
capabilities with your ecosystem partners. This enables quicker access to
data that complies with your standards and accelerators.
2. Productivity
+ Generative AI
What you need to know
What you need to do
What you need to know
Seamless collaboration sparks productivity gains
IDENTIFYING ISSUES THAT FORESHADOW FUTURE DISRUPTION IS ESSENTIAL TO KEEP SUPPLY
CHAINS UP AND RUNNING. BUT THAT’S ONLY THE FIRST STEP. ACTING ON THAT
INFORMATION FAST ENOUGH TO FILL THE GAPS TAKES COORDINATED EFFORT ON A GLOBAL
SCALE.
THAT’S WHERE GENERATIVE AI COMES IN. IT ENABLES FASTER, MORE EFFECTIVE
COLLABORATION BETWEEN PEOPLE, AI ASSISTANTS, AND PARTNERS THAT CAN PROACTIVELY
IDENTIFY SUPPLY CHAIN ANOMALIES AND CORRECT THEM IN REAL TIME.
EXECUTIVES REPORT THAT GENERATIVE AI WILL INCREASE THE VOLUME OF DECISION-MAKING
BY DIGITAL ASSISTANTS BY 21% IN THE NEXT TWO YEARS. WHILE THIS DOES INTRODUCE
NEW OPPORTUNITIES FOR ERROR, 82% OF EXECUTIVES AGREE THAT THE BENEFITS THEY
EXPECT FROM GENERATIVE AI EXCEED THE POTENTIAL RISKS.
OF COURSE, HUMAN WORKERS STILL HAVE A CRITICAL ROLE TO PLAY. THE CREATIVITY,
EMPATHY, AND CRITICAL THINKING SKILLS THEY BRING TO THE TABLE ARE NEEDED TO
RETHINK OPERATIONS AND SOLVE COMPLEX PROBLEMS. HOW THEY APPLY THOSE SKILLS IS
EVOLVING RAPIDLY, HOWEVER, WITH 71% OF SUPPLY CHAIN EXECUTIVES SAYING GENERATIVE
AI COMPLETELY CHANGES HOW THEIR PEOPLE DO THEIR JOBS.
NINE IN 10 EXECUTIVES NOW SAY THEIR ORGANIZATION’S WORKFLOWS WILL BE DIGITIZED
WITH INTELLIGENT AUTOMATION AND AI ASSISTANTS BY 2026. THIS EXPANSIVE
DIGITIZATION PROMISES TO DELIVER BENEFITS ACROSS THE SUPPLY CHAIN, WITH 80% OF
EXECUTIVES EXPECTING GENERATIVE AI TO ENABLE BETTER MANAGEMENT BY ANALYZING ALL
RELEVANT SUPPLIER PERFORMANCE METRICS.
INCREASED VISIBILITY AND TRANSPARENCY HELP LEADERS RESPOND TO RISKS IMMEDIATELY,
RATHER THAN WAITING FOR PARTNERS TO REPORT PROBLEMS AT THEIR OWN PACE.
INTEGRATING CLEAN AND TRUSTED DATA FROM ACROSS THE SUPPLY CHAIN ALSO MAKES IT
POSSIBLE TO POWER AN LLM THAT PEOPLE ACROSS THE INDUSTRY CAN TAP FOR ACCURATE,
REAL-TIME INFORMATION.
WHAT YOU NEED TO DO
FEED GENERATIVE AI DATA THAT SUPPORTS SUPPLY CHAIN PRODUCTIVITY
Map the full range of preemptive data initiatives needed to connect people and
technology across the supply chain ecosystem. Upskill employees and train tools
to speed decisions and actions. Progress an LLM specific to supply chain for
your industry.
* Cultivate human-tech chemistry to uncover real-time insights. Make this
chemistry a commodity that touches every point of the supply chain: planning,
sourcing, manufacturing, and distribution and transportation. Increase
productivity of both humans and AI assistants with generative AI.
* Crank up the dial on process improvement. Look for leaders in each key supply
chain function to suggest and execute supply chain process improvements.
Augment technology with people and people with technology to deliver superior
process outcomes and transform the employee experience. Find ways to free
supply chain professionals from transactional work so they can focus on
solving real business problems.
* Replace traditional dashboards with real-time supply chain large language
model (LLM) queries. Feed comprehensive supply chain metrics and
transactional data into generative AI models. Take the latency out of
decision-making with LLMs that enable immediate insights. Conceptualize new
practices based on gap analysis and points of interrelation. Use the
recommendations for predictive and preemptive decisions and actions.
3. Prediction
+ Generative AI
What you need to know
What you need to do
What you need to know
Generative AI is a mirror that lets you see around corners
PREDICTING THE FUTURE ISN’T JUST FOR FORTUNE TELLERS. GENERATIVE AI SERVES AS A
COUNTERWEIGHT TO GLOBAL COMPLEXITY, LETTING LEADERS DETECT APPROACHING THREATS
AND SUGGEST EVASIVE MANEUVERS BASED ON MORE THAN PREMONITION.
MORE THAN FOUR IN FIVE (81%) EXECUTIVES AGREE PREDICTIVE CAPABILITIES WITH
GENERATIVE AI DETECT PROBLEMS EARLIER, AND 77% SAY GENERATIVE AI MODELS
SUCCESSFULLY IDENTIFY GEOPOLITICAL AND CLIMATE RISKS, ENABLING PROACTIVE
MITIGATION. MORE TACTICALLY, 79% OF EXECUTIVES SAY GENERATIVE AI WILL OPTIMIZE
INVENTORY MANAGEMENT BY PREDICTING FUTURE DEMAND PATTERNS.
IN RESPONSE, 80% OF EXECUTIVES SAY GENERATIVE AI MODELS WITH VISUALIZATION AND
SIMULATION, SUCH AS DIGITAL TWINS, WILL UNCOVER SUPPLY CHAIN BOTTLENECKS IN REAL
TIME. BUT APPLICATIONS WILL BE LIMITED. BY 2025, THEY SAY ONLY 19% OF SUPPLY
CHAIN USE CASES WILL INCORPORATE GENERATIVE AI, INCLUDING SIMULATION AND
MODELING OF COMPLEX SYSTEMS, TRANSPORTATION OPTIMIZATION, PRODUCT LIFECYCLE
MANAGEMENT, AND CUSTOMER SERVICE AND REAL-TIME RESPONSE.
WHAT YOU NEED TO DO
SUPERCHARGE SUPPLY CHAIN OPERATING MODELS WITH GENERATIVE AI PLATFORMS
Create self-learning simulations that let you identify, visualize, and
proactively correct critical operating exceptions. Hyper-automate transactional
work to create next-level operational efficiencies.
* Preempt the next shock. Predict and embrace disruptions. Deploy analytics,
data visualization, and simulation models, along with generative AI
capabilities for pattern recognition. Act calmly and resolutely to keep your
supply chain afloat while the competition takes on water.
* Put mission-critical touchpoints front and center. Align the most crucial and
differentiating supply chain workflows with your early predictive generative
AI use cases. Involve key partners for improved collaborative foresight.
Ensure generative AI-driven artifacts are clearly identifiable and auditable.
* Measure the positive impact of premodeling. Regularly assess the performance
and ROI of generative AI-driven predictive analysis. Set clear goals to
ensure these efforts are delivering the desired results and adjust as needed
for continuous improvement.
The statistics informing the insights on this page are sourced from two
proprietary surveys conducted by the IBM Institute for Business Value in
collaboration with Oxford Economics. The first survey was asked to 200 US-based
executives in September 2023 regarding generative AI and supply chain. The
second was asked to 2,000 executives across 21 countries in April–July 2023
regarding automation and AI.
--------------------------------------------------------------------------------
Bookmark this report
--------------------------------------------------------------------------------
Share
--------------------------------------------------------------------------------
Additional content
Report:
Download a brief overview of key recommendations from “The CEO’s guide to supply
chain”
Summary:
Download “The CEO’s guide to supply chain” and learn how CEOs stay on top of the
fast-shifting changes
--------------------------------------------------------------------------------
Download report translations
Choose an option
Open menu
--------------------------------------------------------------------------------
Originally published 07 November 2023
How can IBM help you?
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Translations available
FORGING THE FUTURE OF SUPPLY CHAINS
Explore 5 supply chain management strategies to meet the evolving needs of
customers, employees, shareholders, and society.
Translations available
THE RESILIENT DIGITAL SUPPLY CHAIN
In partnership with Celonis, we explore how CSCOs are using data and emerging
technologies to design intelligent workflows that power more resilient digital
supply chains.
Translations available
CSCO STUDY - ACHIEVING DATA-LED INNOVATION
Navigating and managing supply chain challenges has, out of necessity, become a
top business priority for not just CSCOs but the entire C-suite.
AUTOMATE TO ELEVATE
Unlock the potential value of AI-powered process mining.
Translations available
FORGING THE FUTURE OF AI: WOMEN CAN TAKE THE LEAD
Generative AI gives women leaders a once-in-a-career opportunity to gain equal
footing. Our new research explains how.
2024 GLOBAL OUTLOOK FOR BANKING AND FINANCIAL MARKETS
This report describes the overall BFM landscape for 2024 as well as critical
generative AI use cases in banking.
You might also like
Translations available
FORGING THE FUTURE OF SUPPLY CHAINS
Explore 5 supply chain management strategies to meet the evolving needs of
customers, employees, shareholders, and society.
Translations available
THE RESILIENT DIGITAL SUPPLY CHAIN
In partnership with Celonis, we explore how CSCOs are using data and emerging
technologies to design intelligent workflows that power more resilient digital
supply chains.
Translations available
CSCO STUDY - ACHIEVING DATA-LED INNOVATION
Navigating and managing supply chain challenges has, out of necessity, become a
top business priority for not just CSCOs but the entire C-suite.
AUTOMATE TO ELEVATE
Unlock the potential value of AI-powered process mining.
Translations available
FORGING THE FUTURE OF AI: WOMEN CAN TAKE THE LEAD
Generative AI gives women leaders a once-in-a-career opportunity to gain equal
footing. Our new research explains how.
2024 GLOBAL OUTLOOK FOR BANKING AND FINANCIAL MARKETS
This report describes the overall BFM landscape for 2024 as well as critical
generative AI use cases in banking.
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