As supply chain leaders grapple with the allocation of artificial intelligence (AI) budgets, a structured approach to digital transformation could be the key to unlocking innovation and revenue growth.
The AI Budget Conundrum
Despite economic challenges, executives are increasingly allocating budgets for AI, particularly generative AI (GenAI) such as ChatGPT and Microsoft Copilot. A recent global survey by Tata Consultancy Services reveals that 51% of Dutch CEOs and 66% of European CEOs are turning to AI for innovation and revenue growth. Gartner, the analyst firm, reported earlier this year that half of supply chain leaders plan to implement GenAI within the next 12 months. However, finding a suitable application for GenAI remains a challenge for many supply chain executives.
The Digitalization Mountain
A recent study among 60 Dutch supply chain directors indicates that ‘business transformation and digitization’ ranks second on the board’s priority list at 55%, just behind ‘operational excellence and cost savings’ at 57%. The challenge lies in how companies can effectively navigate this digitalization mountain.
A Structured Approach to Digital Transformation
A structured approach to digital transformation was recently tested in a workshop with supply chain executives from multinationals, yielding positive results. The journey begins at the base camp, where pain points in the end-to-end supply chain are assessed. Camp 1 aligns the business strategy with supply chain challenges. Camp 2 involves checking the right data and available IT tools. It is only at Camp 3 that the need for new tools like GenAI is considered, along with successful use cases from other companies. Camp 4 prepares for the final stage: the go-live of the application.
Navigating the Complexity of Supply Chains
Given the complex nature of supply chains, securing an AI budget can be a daunting task. However, visualizing the digital mountain can help manage expectations around AI and guide supply chain directors on their digital ascent.
