Strategy

Orgs are reassessing GenAI in their supply chains, EY finds

Reassessments are about “achieving scale and maximizing impact.”
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Surprise, surprise: Implementing new AI technologies into business operations is easier said than done.

New research from EY explores the difficulties of implementing generative AI in supply chain programs. Roughly three-quarters of the 460 supply chain and operations executives EY surveyed said they plan to deploy GenAI in their supply chains, and eight in 10 believed the technology can “reinvent supply chains.” However, most organizations (62%) have had to reassess their implementation projects, and a mere “7% have completed implementation.”

EY reported that the factory resets are largely focused on “achieving scale and maximizing impact,” and that companies are taking a more strategic and deliberate approach to implementing the technology. The accounting firm had in-depth conversations with seven executives, who said “it was tougher than expected to make the technical leap from proof-of-concept to GenAI at scale.”

Organizations that did opt to take a step back and reevaluate their approach learned some important lessons, according to the research. For instance—and CFOs had better take note—64% of organizations that are reassessing their strategy said they’ve reallocated funding from other AI activities toward their GenAI supply chain initiatives. That’s 20 percentage points higher than organizations that didn’t reevaluate their implementation.

Also, 81% of companies that are reassessing their GenAI supply-chain implementation indicated that support from the C-suite is very or extremely important, compared with 69% of respondents whose companies didn’t reassess their programs.

Organizations that have rethought their GenAI initiatives are also more attuned to AI’s risks. For instance, 76% of respondents whose firms have reconsidered their initiatives said that reduced employee productivity due to job insecurity was a moderate to major risk, compared to 56% of respondents whose organizations didn’t revisit their GenAI plans.

Two-thirds of respondents in the reassessment camp indicated that exposure to legal liability through intellectual property infringement was a moderate to major risk, versus 53% who didn’t reexamine their implementation.

EY found that “front-runners,” or “organizations further ahead on the journey to autonomous supply chains,” are looking to deploy GenAI technology in the coming years in areas like product design, logistic network design, global trade optimization, and demand forecasting.

News built for finance pros

CFO Brew helps finance pros navigate their roles with insights into risk management, compliance, and strategy through our newsletter, virtual events, and digital guides.