JDA and KPMG survey shows AI potential for supply chain technology
The second annual joint survey of supply chain executives from JDA Software and KPMG details the key innovation investments across retail, manufacturing and logistics in 2019. The JDA & KPMG Digital Supply Chain Investment Survey, conducted by Incisiv, reveals that end-to-end visibility continues to be the number one priority for the second consecutive year, driven by artificial intelligence (AI), machine learning (ML) and cognitive analytics.
The survey reveals that supply chain traceability and visibility continues to be the highest investment area for supply chain executives (77%). To achieve this level of visibility, supply chain executives plan to deploy or test cognitive analytics (82%), AI/ML (62%) or digital control tower (55%) technology in the next 24 months. Together, AI and ML technologies are viewed as the most impactful technology this year (80%) given its wide applicability and promise of addressing complex business problems across the value chain.
Cognitive/predictive analytics was also ranked highly, as 75% of respondents believe it will have a disruptive impact in the year ahead. Overall, since last year, AI has shifted into the high impact/high planned adoption quadrant for surveyed executives, confirming the importance of the impact this technology will have on supply chains in the year ahead.
Looking at how impactful AI/ML technologies are, survey respondents found the highest value use case to be the ability to optimise inventory (51%) followed by predictive distribution (45%) and optimising distribution networks (42%) because companies need the ability to fulfil from anywhere, profitably. Cross-industry, the highest value use cases for AI were identified by respondents to be:
- Increasing inventory and pricing accuracy for retail.
- Improving demand forecasting for manufacturing.
- Optimising distribution network for logistics.
Though speed-to-market was ranked as a top investment driver for 69% of respondents, resistance to change is the number one challenge to driving innovation for 42% of respondents. The inability to assess the potential of new technology has risen over the last year, indicating a disconnect between technology hype and technology value.
Another way executives are driving innovation is through cloud technologies. Respondents view cloud adoption as enabling speed-to-market. A majority of respondents (64%) believe cloud helps them quickly adapt to business needs and drive business agility twice as fast as any other technology.