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By Gartner’s last count, supply chain executives were allocating about 67% of their digital investment budgets to artificial intelligence (AI). In return, they expect to improve decision-making, increase productivity and reduce operating costs by prioritizing AI across their supply chain operations.
Looking out further, Gartner forecasts that annual spending on supply chain management software with agentic AI capabilities will reach $53 billion by 2030. But it’s not all rainbows and unicorns for the companies selling these solutions or the ones that are implementing them. In the same survey, Gartner found that 55% of chief supply chain officers couldn't determine the returns on their AI investments.
That’s a major worry point for companies committing substantial budgets to technologies they’re counting on to deliver measurable business benefits, but there’s another catch: According to a new Association for Supply Chain Management (ASCM) report, supply chain employees aren’t prepared to use AI effectively.
The People Paradox in Supply Chain AI Integration report from ASCM and the Digital Supply Chain Institute (DSCI) found that even though 91% of organizations plan to use AI to augment human workers, 83% of them say their employees are unprepared to use AI effectively.
“AI adoption in supply chain is more about people than it is technology,” said ASCM CEO Abe Eshkenazi. “The organizations making real progress treat workforce readiness as part of the technology investment, not an afterthought. They learn by doing, bringing managers into the process early, and building trust one function at a time.”
7 Key Trends to Watch
Companies are interested in AI, but putting the technology into practice isn’t always easy. According to ASCM, four problems are holding them back: employees who aren't ready to use AI, concerns about letting the technology make decisions on its own, cybersecurity risks and questions about whether the investment is paying off.
The numbers are encouraging, but there’s plenty of room for improvement. More than half of respondents (55%) describe their AI deployments as “somewhat successful.” Over the next two years, they expect the biggest benefits from faster decisions and shorter planning cycles (46%), lower supply chain costs (42%) and more process automation (40%).
What does all this mean for supply chain operations? Here are seven survey findings that tell the story:
- Employees aren’t ready for AI. Most respondents (83%) say their employees aren’t prepared to use AI effectively, and just 14% say their organizations are fully prepared. Only 7% expect AI to directly replace workers, while 51% expect employees to take on more decision-making responsibilities.
- AI adoption remains limited. Across 13 supply chain functions, AI adoption averages 1.94 on a five-point scale, where 1 means no use and 5 means fully autonomous execution. Demand planning ranks highest at 2.28, followed by supply and inventory planning at 2.12.
- Executives are driving AI initiatives. Most C-suite respondents (82%) actively lead, implement or expand AI initiatives, compared with just 12% at the director level. Half of directors, 51% of managers and 70% of staff know about these initiatives but aren’t actively involved.
- Workforce readiness makes a difference. Among organizations with AI-ready employees, 17% have deployed AI across an average of six supply chain functions, with a 71% project success rate.
- Skills and financial returns remain major obstacles. A lack of workforce skills and resources (33%) and an uncertain business case or return on investment (33%) share the top spot among barriers to AI adoption. Poor data quality follows at 25%.
- Cybersecurity remains a concern. Nearly all respondents (92%) are concerned about cybersecurity risks involving AI-enabled suppliers and trading partners. Yet organizations have implemented an average of just 2.3 out of six standard security practices.
- Companies want to understand AI’s decisions: Most respondents (91%) want to know how AI models generate predictions and recommendations, while 43% are concerned about algorithmic bias in supplier selection or inventory allocation.
More Roadwork Ahead
So, there’s clearly more work to be done at the AI-supply chain intersection before companies can recoup their investments and start seeing the promised benefits. “Leaders have accepted AI in principle. What most organizations haven’t built yet is the capacity to execute it in practice,” said DSCI’s Marko Kovacevic. “With tariff shifts, demand shocks and geopolitical disruption, the advantage will go to companies that can sense and re-plan the fastest. That makes AI readiness a management challenge first and a technology challenge second.”
