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Rising costs are the main challenge for supply chain, finds report

Vaibhav Vohra. (Image source: Epicor)

The 2024 Agility Index research study by Epicor and Nucleus Research reveals that nearly half of companies in the make, move, and sell industries consider rising costs as the primary challenge for supply chains.

More than half of these companies are using artificial intelligence, automation, or machine learning in at least one supply chain management application to tackle these issues. Notably, 63% of high-growth businesses — those with a revenue increase of 20% or more over the past three years — have already implemented generative AI in their supply chain operations to manage costs and operational challenges.

Nucleus Research surveyed over 1,700 supply chain management leaders globally to explore how they are utilising advanced technologies such as artificial intelligence and machine learning to overcome challenges like supply chain disruptions, rising costs, and skilled labour shortages. The study also highlighted planned future investments in these technologies.

“When workers are empowered to spend more time innovating — what humans do best — that’s where the real value creation happens. That is agility,” said Vaibhav Vohra, chief product and technology officer at Epicor. “Our 2024 Agility Index underscores the growing adoption of AI and other automation technologies as an essential factor in enabling supply chain businesses to better thrive and compete. These cognitive capabilities are coming together to empower workers and their businesses to more readily adapt to shifting market conditions and better serve their customers.”

Survey highlights

Survey respondents indicated they are integrating generative AI into digital supply chain operations across various functions such as product descriptions, customer service chatbots, natural language querying, reporting, and in-application assistance. Specifically, the adoption of generative AI in customer service chatbots, noted by 72% of organisations, is highlighted as the most prevalent use case. This widespread implementation is attributed to the technology's ability to streamline customer interactions across various sectors.

Similarly, 67% of organisations currently employ generative AI for crafting product descriptions, leveraging the technology's capacity to analyse customer sentiment and forecast market demand. This enables a more informed approach to product design and feature development.

Businesses are widely adopting machine learning, particularly in inventory optimisation (45%) and demand forecasting (40%), highlighting the importance of these technologies in managing stock levels and accurately predicting future demand.

Survey respondents indicated that the most anticipated benefits of automation technologies are increased efficiency and productivity (32%), cost savings (26%), and enhanced supply chain automation (23%). This demonstrates a strong confidence in the potential of these technologies to bring substantial improvements in supply chain management.