Productivity Gains often Lost from Other Dynamics

There of course is much interest in use of AI generally and Generative AI more specifically in the supply chain

Supply Chain Digest Says... So what to do? Gartner recommends companies adopt something it calls “aligned organizational productivity” (AOP). What do you say? Click here to send us your comments   Click here to see reader feedback

But in most companies, there are important barriers to achieving significant value from those investments in the supply chain.

That according to a recent report from the analysts at Gartner.

In terms of interest, a Gartner survey in late 2023 found that 80% of chief supply chain officers (CSCOs) said they were planning on deploying GenAI in the next year.

Following up a year later, a solid 72% actually made those investments.

But there are some real challenges in finding and measuring the ROI. Most companies investing in AI say they are doing so to improve worker productivity.

That leads Gartner to cite the following factoid: The typical supply chain individual contributor uses an average of 3.6 GenAI tools in their daily job spread across a wide range of use cases, including quantitative information analysis, chatbots and virtual assistants, and content generation.

This, Gartner says, leads to a reduction of individual desk-based workers of 4.11 hours of time weekly.

However, the report says, GenAI also introduces behaviors that reduce productivity. How? Consider the following:

• Productivity results evaporate at the team level: Team time savings from GenAI decline by 63% when aggregated, Gartner says. Team managers are more than 10% less likely to see improvements in output, and fewer than half of team managers agree that GenAI is improving their teams’ work quality.

• Your workforce is more than just the desk-based worker: Gartner finds that many organizations are successfully deploying GenAI at the frontline for better access to information, assistance and direction with real-time job tasks, and a host of other activities, particularly when the use cases move beyond text-based use cases. The problem is that GenAI productivity impacts for frontline workers — the largest part of the supply chain workforce — underperform the GenAI productivity impacts for desk-based workers.

• Gartner also says that more GenAI creates more anxiety (which creates less productivity): Most have probably encountered the narrative in headlines (or even just through water cooler talk) that GenAI can be a job killer, and thus there exists a “GenAI-anxiety doom spiral,” as depicted in the graphic below:

Source: Gartner

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So what to do? Gartner recommends companies adopt something it calls “aligned organizational productivity” (AOP). That involves the following:

Use case — Identify use cases that will make individuals more creative.

Talent strategy — Create novel human roles oriented around using GenAI.

Management approach — Measure innovation and manage the employee experience.

Adopting this approach leads to measurable improvements in productivity from GenAI investments, Gartner says.

Any comments on Gartner’s thoughts on GenAI in supply chain? Let us know your thoughts at the Feedback section below.