Blue Yonder on Tech's Growing Centrality in Supply Chain
As market disruptions redefine business landscapes, supply chain executives increasingly prioritise technology to enhance resilience, agility and speed.
According to Blue Yonder's inaugural Supply Chain Compass report, nearly 700 senior supply chain leaders in North America and Europe are turning to technology with specific emphasis on new tech adoption (51%), efficiency and productivity improvement (40%) and strengthening supply chain resilience (29%).
To translate these priorities into practice, almost 46% of these leaders emphasise improved demand planning and rapid access to performance data as critical for achieving strategic objectives.
Followers with similar strategic priorities note the importance of tracking visibility tools (45%), digital software transformation (41%) and effective cost management (33%).
This shift highlights an acute awareness within the sector regarding the technological competencies necessary to manage a volatile macroeconomic environment.
Andrea Morgan-Vandome, Chief Innovation Officer at Blue Yonder, explains: "A consistent theme among surveyed leaders was the adoption of innovative solutions that deliver true end-to-end visibility across the supply network and enable a more connected, intelligence-driven approach to demand and supply planning."
Tech investment takes centre stage
Technology emerges as a pivotal instrument for transformation with about three-quarters (74%) of supply chain leaders acknowledging AI's impact on business operations.
However, 82% reveal that outdated systems still impede technological potential, underscoring a push towards new tech investments where 51% consider it a top strategic priority for the coming years.
The eagerness to invest is notable, with nearly 89% setting budgets aside for supply chain tech and 61% planning to invest between US$1m and US$10m in the next five years.
This substantial financial commitment signifies strong confidence in digital solutions as a means to combat market unpredictability and enhance operational efficiency.
Gen AI, however, remains on the periphery of widespread adoption.
While 83% of survey participants are actively using or deploying automation powered by traditional AI and 78% leverage machine learning, only 36% have embraced Gen AI, indicating a cautious yet increasing curiosity.
Among organisations not pursuing Gen AI, several reasons emerge. Approximately half (51%) favoir a people-centred approach over introducing cutting-edge technologies, with cost posing a significant hurdle — particularly for companies with technology budgets below US$500,000.
Others prioritise different short-term goals, such as enhancing inventory automation.
Adoption of Gen AI also differs across industries. Firms engaged in transportation, order management and fulfilment show a higher likelihood (46%) of piloting or planning its use. Conversely, just 16% of logistics operators report having no intention of implementing generative AI at all.
Sustainability enters the core supply chain agenda
Sustainability is now integral to supply chain strategies, intertwined with technological progress.
With sustainability being a buzzword, more than two-thirds (68%) of operators feel compelled to tackle environmental issues such as waste and climate change.
Organisations with a focus on sustainability benefit from more optimistic business prospects, aligning operational advancements with foresighted tech selections.
Their initiatives predominantly include physical upgrades like sustainable packaging (37%), waste reduction (30%), recycling (28%), green fuel adoption (28%) and emissions reduction in warehouses (27%).
Technology-driven sustainability initiatives, however, have a smaller current footprint, with only 22% leveraging data analytics for emission tracking, 17% employing connected networks for efficient shipping and 13% using tech to minimise waste from expired inventory.
Still, 26% express a belief in forecasting technology’s dual role in promoting efficiency and sustainability.
Among organisations that prioritise sustainability, technology use tends to be more advanced.
End-to-end data connectivity is seen as fundamental to success by 94% of these leaders, compared to 85% of the overall sample.
Four in five say AI is already changing how they operate, while 61% are actively investigating the use of Gen AI.
"The intersection of technology and sustainability presents a promising opportunity," highlights Saskia van Gendt, Chief Sustainability Officer at Blue Yonder."
"Leaders who prioritise sustainability are leveraging advanced technologies such as AI and data connectivity to enhance efficiencies and reduce environmental impact. By embracing these innovations, we can transform our supply chains into powerful engines of sustainable growth."