Report: Companies embrace technology to fight supply chain stressors

Supply chain leaders are leveraging artificial intelligence (AI) and automation to navigate supply chain challenges and “future-proof” their companies’ supply chains, according to a recent IBM Institute for Business Value (IBV) survey of more than 1,500 chief supply chain officers (CSCOs) and chief operating officers (COOs).

IBM’s Own Your Transformation study reveals how supply chain leaders are navigating the challenges brought on by the Covid-19 pandemic, inflation, climate change, and geopolitical events. The study surveyed CSCOs and COOs in more than 35 countries across 24 industries and found that most are increasing their investments in automation, AI and intelligent workflows, ecosystems, and sustainability. The authors also said that supply chain leaders are “reimagining their supply chain operations.”

“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,” according to 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.”

Nearly half of CSCOs surveyed (47%) said they’ve introduced new automation technologies in the last two years, an approach the study’s authors say “can add predictability, flexibility, and intelligence to supply chain operations.” The study also found that CSCOs are using AI to help monitor and track performance.

Sustainability issues are key challenges as well. CSCOs ranked sustainability as their third biggest challenge in the next few years, behind supply chain disruptions and technology infrastructure. More than half of supply chain leaders placed sustainability at or near the top of their priority list, and 50% said that their sustainability investments will accelerate business growth. CSCOs and COOs said they experience the most direct pressure for sustainability transparency from: investors (56%), board members (50%), and customers (50%).

The study also identified “the innovators”—20% of respondents that stand apart for accelerating their data-led innovations. This group is outperforming their peers in many areas, including reporting 11% higher annual revenue growth, according to the report. Steps the innovators are taking include:

• Integrating automated workflows across organizational functions and with their partners for real-time visibility, insights, and action (95% more than other CSCOs).
• Modernizing their technology infrastructure: 56% are currently operating on hybrid cloud, and 60% are investing in digital infrastructure to scale and deliver value.
• Extending their sustainability initiatives and creating new products and services; 58% said they see opportunities to improve customer engagement through sustainability imperatives.
• Focusing deeper on cybersecurity (nearly 20% more than other CSCOs).