Risks of Lack of Strategy for AI in Supply Chains
By Pablo Valerio 06.13.2025 0
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In an era of unprecedented divergence and volatility, global supply chains find themselves at an inflection point, where lack of artificial intelligence (AI) strategy creates long-term risks.
While once reliable operating assumptions are no longer stable, the strategic importance of supply chain management has surged to the forefront of C-suite concerns.
A commanding 75% of Chief Executive Officers now believe that supply chain disruption is one of the most significant risks to their business.
Yet, despite artificial intelligence’s escalating impact, a stark and potentially perilous disconnect persists: just 23% of supply chain organizations have a formal, documented AI strategy in place.
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This alarming statistic, revealed in a recent Gartner survey conducted between December 2024 and January 2025, suggests that many Chief Supply Chain Officers (CSCOs), operating under intense pressure to demonstrate an immediate return on investment (ROI), may be inadvertently jeopardizing AI’s profound long-term transformative potential within their operations.
 Source: Gartner PR
“CSCOs feel pressure to achieve short-term ROI from their AI investments, but they must ensure these quick wins don’t create future constraints,” cautioned Benjamin Jury, senior principal of research in Gartner’s Supply Chain practice.
This prevailing project-by-project approach focused narrowly on short-term gains, risks creating what Gartner refers to as inefficient “franken systems”—complex, layered architectures that impede scalability, prolong the payback period for AI transformations, and ultimately yield only marginal long-term benefits with fragile technical infrastructure.
Peril of fragmented investmentsThe chasm between tactical deployment and strategic direction represents a critical vulnerability for most enterprises.
While 57% of organizations have already integrated AI into selected functions or across their entire organization, indicating widespread adoption, this activity often lacks a coherent, guiding vision.
Supply chain leaders primarily measure AI success through cost savings and efficiency, neglecting revenue growth and innovation.
AI is predominantly viewed as a cost-cutting tool rather than a transformative engine for growth. It starkly contrasts the broader focus of CEOs, who increasingly view AI as a critical driver for growth. The consequence of this strategic short-sightedness is substantial; 77% of CEOs concede that their current operating model is inadequate to compete in an AI-dominated world.
Evolving mandate of the CSCOThe shift to an AI-driven world demands fundamental change. The CSCO’s traditional role, centered on operational excellence and cost control, is giving way to a new breed of enterprise leader.
The modern CSCO must act as a strategic orchestrator, a customer champion, a steward of resilience, and a leader of profound human-machine transition. This transformation moves the supply chain’s core mission from cost minimization to value creation, positioning it as a primary driver of growth, customer satisfaction, and enterprise resilience.
 Sources: Gartner, McKinsey, Deloitte
This new mandate includes owning the customer experience. Gartner predicts that by 2027, 30% of large global supply chains will adopt the Customer Effort Score (CES) as a key performance indicator for the CSCO.
The new position is a monumental leap from the current state, where a mere 4% of CSCOs are formally held accountable for the company’s overall customer experience vision and strategy.
Moreover, as AI automates decision-making, the CSCO’s role will pivot from making direct operational decisions to designing the systems that do, establishing governance frameworks, risk intelligence protocols, and ethical guardrails.
Additionally, the CSCO must guide people through the profound changes AI will bring. As Gartner aptly observes, technological change is transactional, but the human response—the transition—is emotional.
The adoption of AI inevitably surfaces fear and uncertainty among employees. The CSCO must foster a culture that moves from anxiety to curiosity and ultimately to hope and excitement. As Gartner powerfully states, “We don’t get credit for turning technology on; we only get credit when people use it.”
Roadmap for AI-powered transformationTo navigate these complexities, Gartner advises CSCOs to develop an AI investment portfolio that balances short—and long-term priorities judiciously. This involves adopting the “ Run-Grow-Transform” framework to allocate resources strategically.
The “Run” phase focuses on foundational improvements, enhancing operational efficiency and optimizing costs through AI-driven automation and predictive maintenance; the “Grow” phase fosters cross-functional alignment and enhances decision-making capabilities, such as integrating AI into core processes like Sales & Operations Planning.
Finally, the “Transform” phase involves making “principled bets”—calculated, higher-risk, longer-payback initiatives with the potential to fundamentally reshape the business, such as leveraging AI for deep consumer insights or proactive demand shaping.
 Sources: Gartner and PWC
PwC’s “ Four Principles for AI Value Creation” further provides a pragmatic guide for implementation and governance, emphasizing a clear AI strategy with leadership sponsors, a focus on high-ROI use cases, building a strong technology and data foundation, and robust organizational structures and AI governance.
Furthermore, investing in AI-ready infrastructure requires collaboration with CIOs and other executive leaders to ensure scalability and adaptability.
Supply chain leaders risk missing truly transformative opportunities without such principled bets on calculated, higher-risk projects with longer payback periods.
Overcoming implementation challengesWhile AI’s potential is immense, realizing its value is fraught with obstacles. Foundational challenges include poor data quality, lack of standardization, and fragmented data, which leads to 43% of business leaders admitting they lack a clear view of even their top suppliers’ performance.
Organizational hurdles encompass a severe talent gap, with the percentage of companies reporting a skills gap increasing from 55% in 2021 to 69% in 2023, and change management identified by McKinsey as the single biggest risk to implementation, cited by 82% of supply chain leaders.
The lack of a formal AI strategy, often driven by a myopic focus on short-term ROI, could render many supply chains ill-equipped to navigate the complexities and leverage the full potential of an increasingly AI-dominated world.
The evidence is conclusive: AI is the catalyst for reinventing supply chain management, transforming linear, cost-focused operations into intelligent, networked, and increasingly autonomous ecosystems designed for resilience, customer-centricity, and strategic growth.
It is no longer just about optimizing costs but about securing a competitive future.
RELATED TOPICS: AI, CSCO, STRATEGY, SUPPLY CHAIN |
