Beware the ‘Doom Loop’: Early Generative AI Supply Chain Developments Show Productivity Paradox: Gartner
Early advances in generative AI have led to productivity gains for desk workers, but have been less impactful for the supply chain frontline, according to a Gartner survey.
The survey, conducted in August 2024 among 265 global respondents, found that generative AI adoption is surging across supply chain organizations, with 72% now deploying the technology in some way. However, tracking productivity and return on investment remain more complex.
Expectation Versus Reality
Homing in on specific examples, expectation is falling short of reality for many supply chain workers: The data reveals some notable productivity boosts, with generative AI tools saving an average 4.11 hours of time weekly for desk-based employees while also producing higher quality work at a faster rate.
When broadened out to look at team-level productivity, however, time-savings dropped to 1.5 hours per team member weekly, with no link found between generative AI usage and improved output or higher quality of work.
While generative AI is streamlining tasks and saving time in supply chain processes, its impact hasn’t been evenly distributed, the survey said. Employees are also typically juggling an average of 3.6 generative AI tools, leading to heightened anxiety that can put a dampener on overall productivity. To maximize generative’s potential, companies need to focus on making these tools more intuitive for — and inclusive of — all workers, Gartner analysts said.
‘A Doom Loop’
More is not always more in generative AI investments — a realization that is dawning on many companies as early excitement around the technology settles into expectations for tangible results.
“In their pursuit of efficiency and time savings, CSCOs may be inadvertently creating a productivity ‘doom loop,’ whereby they continuously pilot new GenAI tools, increasing employee anxiety, which leads to lower levels of productivity,” said Sam Berndt, senior director in Gartner’s supply chain practice. In this sense, Berndt said supply chain leaders need to examine their overall strategy rather than bring more and more generative AI tools into the workplace.
All is not lost, however. In terms of tracking the ROI of generative AI investments, Gartner recommends supply chain leaders instead rethink their approach, shifting focus from pure efficiency gains to broader organizational productivity — a shift they said will require greater integration of frontline workers, addressing employee anxieties, and prioritizing applications that drive creativity and innovation.
To start this shift, Gartner said CSCOs should focus on refining their generative AI strategies across three areas: use cases, talent, and management. Instead of just automating for speed, supply chain teams should tap into AI’s creative potential, aiming to unlock smarter workflows, better decision-making, and opportunities beyond basic time savings.
“[U]se-cases encourage employees to utilize GenAI tools to approach their strategic tasks more thoughtfully, with an emphasis on those that incorporate interactions with direct peers and colleagues,” the report outlined.
Supply Chain & AI
Despite mixed results on productivity, supply chain leaders at many leading CPGs have shown enthusiasm for the technology and started the process of deployment of generative AI in their operations, with applications ranging from demand forecasting to procurement.
General Mills is just one example of a CPG strategically deploying AI in the supply chain, using the technology to shift its supply chain to an "always-on" model. By enhancing procurement data, it identifies cost gaps in ingredients and packaging, reducing waste by over 30%.
Similarly, P&G is using data and machine learning algorithms to optimize truck scheduling to minimize driver idle time, as well as tapping AI tools to optimize fill rates and for dynamic routing and sourcing optimization.
More broadly, many CPGs are focused on transforming the way they think about supply chain in their business. Gallo, for example, recently outlined how it is planning to elevate the function in their organization, creating a Center of Excellence built around four key pillars.
