The C-Suite Develops Supply Chain Innovation Plans

Blockchain tends to receive the most excitement and attention on the topic of supply chain technology, but it’s not the tool the C-suite is focusing on — and investing in — the most.

A new report from KPMG and JDA Software, the “JDA & KPMG Digital Supply Chain Investment Survey,” explored what c-level executives are spending company cash on to improve their supply chain strategies. With corporate leaders seeking ways to improve visibility through their supply chains, researchers found that artificial intelligence (AI), machine learning (ML) and cognitive analytics emerged as top investment targets today.

“A truly autonomous supply chain requires predictive end-to-end visibility and these survey results echo our vision to make this a reality for our customers,” said JDA Industry Strategies Group Vice President Fred Baumann in a statement. “Supply chain executives must invest in the critical technology elements such as AI/ML that will simultaneously unlock the value from customers data while shedding light on disruptions before they occur, recommending prescriptive actions for a smarter, more agile supply chain.”

The survey also explored some of the specific applications in which artificial intelligence and machine learning may impact the supply chain, including processes in retail, manufacturing and logistics. But these technologies aren’t the only ones the c-suite is looking at: the cloud continues to play a vital role in a variety of use-cases to address supply chain friction, particularly when it comes to promoting adaptability and flexibility of their supply chain management solutions.

“As the study found, supply chain visibility continues to be the highest priority for executives, and in just a year, plans to invest in cognitive and predictive analytics have skyrocketed,” said KPMG U.S. Advisory Principal and Procurement and Product Operations Leader Brian Higgins in another statement. “Investments in these technologies, as well as AI and ML and digital control tower technology, over the next couple of years will offer the most impact for gleaning and leveraging data insights.

“This holds the potential to truly change the game for enterprise supply chain execs as they can track conditions in real-time, detecting issues and addressing them proactively for optimization,” he added.

KPMG and JDA Software commissioned Incisiv to survey 93 c-level supply chain executives across the retail, manufacturing and logistics sector earlier this year. Below, PYMNTS highlights the key data points of the research.

Of the executives, 82 percent plan to test cognitive analytics in their supply chain management processes in the next 24 months, making it the most popular technology for the space today. That compares with 62 percent planning to pilot artificial intelligence and machine learning solutions, and 55 percent with plans to deploy digital control tower technology.

And 80 percent of respondents said AI/ML combined are the most powerful tools in this area of application, despite more planning to deploy cognitive analytics solutions. That’s because these executives believe AI and ML to have the broadest applicability, and show promise at addressing the widest range of business challenges, researchers found. Three-quarters of respondents said cognitive analytics will have a disruptive impact in the supply chain management space within the next year.

Seventy-seven percent of survey respondents said supply chain visibility and traceability are their top investment focuses. With this goal in mind, these professionals are banking on cognitive analytics, machine learning, artificial intelligence and control tower technology to provide that visibility in their supply chains.

Fifty-one percent say AI and ML will enable inventory optimization, making it the most popular application for technology this survey found. Forty-five percent said AI and ML will enable predictive distribution, while 42 percent said it supports network distribution optimization. In the retail space, professionals said AI and ML have the greatest potential in the area of inventory and pricing accuracy improvements; manufacturing pointed to demand forecasting, while the logistics sector said optimizing distribution networks is their highest-value use case for AI.