Embracing Artificial Intelligence in Supply Chain Management

Abstract

Significant, long-lasting performance gains may be achieved by integrating digital applications with adjustments to business processes. Despite firms' best efforts, only a small fraction of them have fully realised the benefits of digital technology in optimising their supply chains. According to a recent McKinsey analysis, supply chain digitalization lags behind the other four industries studied by a wide margin. Only 2% of business leaders polled said that supply chain management was the primary goal of their digital initiatives. Do they have their priorities mixed up? Perhaps. McKinsey found that the yearly growth rate of EBIT for firms that actively digitised their supply chains was 3.2%, the highest rise from digitising any business segment, and that annual revenue growth rate was 2.3%. This research shows that a lack of adequate technology and poor management decisions are mostly to blame for the gap between expected and realised benefits of supply-chain digitalization.