According to a recent industry-wide survey, only a quarter of supply chain companies are applying AI insights and applications to enhance their operations. As a cutting-edge technology, it shouldn’t surprise logistics leaders to be a bit behind the curve, because this stat is part of larger worrying trend — the supply chain industry suffers from a tech-adoption lag. Many established processes in the industry still rely on aging technology and some are even outright paper-based. However, farsighted leaders in the supply chain are increasingly uncomfortable with this ‘tradition’.
In 2024, leaders are looking around at the gains made by emerging tech like AI in other industries and are also observing a growing number of risks — the Red Sea disruptions come to mind — that seem outside the ability of their current tech stack to manage. These dual sources of strain are making the tech adoption lag harder and harder to sustain.
According to a recent industry-wide survey, only a quarter of supply chain companies are applying AI insights and applications to enhance their operations. As a cutting-edge technology, it shouldn’t surprise logistics leaders to be a bit behind the curve, because this stat is part of larger worrying trend — the supply chain industry suffers from a tech-adoption lag. Many established processes in the industry still rely on aging technology and some are even outright paper-based. However, farsighted leaders in the supply chain are increasingly uncomfortable with this ‘tradition’.
In 2024, leaders are looking around at the gains made by emerging tech like AI in other industries and are also observing a growing number of risks — the Red Sea disruptions come to mind — that seem outside the ability of their current tech stack to manage. These dual sources of strain are making the tech adoption lag harder and harder to sustain.
How can tech-minded supply chain professionals work to close this gap and create company cultures that support necessary innovation? While several areas warrant attention, three stand out as pragmatic places to make this culture shift. Supply chain leaders should consider how technology is thought about at the highest levels of their organization; the relationship between tech and employee productivity; and finally, the connection between tech and customer satisfaction. Each of these is critical to building a more tech-positive supply chain company.
Tech Adoption Starts at the Top
A company’s outlook on technology starts at the top. Among the C-Suite, there needs to be a clear connection between business goals and the tech that’s used to pursue them. Does the leadership overall understand that technology isn’t an isolated or separate concern from the rest of the business? It’s a central tool for driving business forward — or holding it back. Paper and pens are technology, just the same as a GenAI large language model is. One just happens to be way more advanced than the other. As the highest-ranking executive, CEOs can help their businesses close the gap by modeling this more expansive and goal-oriented understanding of technology.
The CIO’s attitudes towards tech and its relationship with the core business are also hugely influential. In almost all cases, it’s the CIO who will make every effort to advance the company’s tech capabilities and implement solutions that support the bottom line. But the approach to these efforts can easily get confused. CIOs seem to fall prey to a hermetic mode of operation — endlessly tinkering with small projects and experiments that never seem to go global within the company or, perhaps even more tellingly, never seem able to make a strong business case for their adoption.
In general, supply chain leaders need to implement an outcome-based approach to technology that understands its importance as a business driver but demands evidence showing how specific solutions under consideration will give ROI. If technology is allowed to decouple from outcomes, the C-Suite won’t be able to track its relationship to their work. And if the C-Suite doesn't see it, neither will the rest of the staff.
An Employee Enabler
Although tech adoption starts at the top, it also needs to be understood as empowering every employee to do their job better. Supply chain leaders should see employee satisfaction and efficiency as directly connected to their bottom line. Better route optimization software, TMS’ that actually work — even functional videoconferencing software — all this adds up to happier and more productive employees. Not only does this help with retention and stem the tide of burnout, but it also makes it easier for employees to better serve customers, paying the satisfaction forward in ways that are directly aligned with business goals.
Tech for more Satisfied Customers
Appreciating the deep connection between tech and better CX can also help organizations accelerate their tech profile. Advanced freight tracking technology for example, gives customers granular updates on shipments that translate to greater peace of mind. AI-enhanced interactions between company and customer can also help customers get the information they need about their shipments more quickly. These aren’t mere conveniences. These are loyalty builders and competitive advantages. By leveraging tech to create seamless CX, logistics professionals can make themselves the preferred choice in solving their customers’ supply chain problems.
Continued Complexity
The rising demands of customers and increased risks seen in the last few years are not analogous. They’re better interpreted as a trendline for continued complexity—one that coincides with rapidly rising customer expectations and increased employee burnout. Digital transformation is not the silver bullet for all these problems, but supply chain organizations that embrace technology will find themselves ahead of the curve on many of them. Getting leadership on board and supporting happier employees and customers will go a long way in helping supply chain companies break the habit of slow technology adoption.
