Gartner tackles three GenAI misconceptions affecting supply chain talent strategies

Chief supply chain officers (CSCOs) may be a little too optimistic about the potential of generative AI (GenAI), and these misconceptions may have a negative impact on their talent strategies. This is according to analyst firm Gartner. This finding is notable because 64% of supply chains will implement GenAI this year. However, according to Gartner, it is not too late for CSCOs to make the necessary course corrections.

For the study, Gartner analysed cross-functional data collected in November 2023 among 822 business executives involved in their company’s GenAI strategy. Of them, 112 were from supply chain. The data revealed that, out of all the business functions, supply chain executives foresee the largest number of staff reductions by 2025 due to the emergence of GenAI.

“GenAI should be an opportunity for CSCOs to fulfil many of their talent aspirations, including freeing up their teams for higher-value work and attracting top tech talent,” reports Sam Berndt, Senior Research Director at Gartner. “However, our data shows that there is a real risk that many CSCOs will use GenAI to invest in misconceptions that have already led to talent shortages, burnouts and retention issues for the discipline.”

Misconception 1: labour cost savings and efficiency

Gartner’s analysis of the survey data yielded three misconceptions about GenAI that the analyst firm believes will have a negative impact on supply chain talent in the foreseeable future if CSCOs fail to alter their course.

The first misconception is that GenAI is mainly about labour cost savings and efficiency. An overemphasis on labour cost savings is not only unrealistic, according to Gartner, but also risks alienating a company’s employees as they see their prospects for long-term careers in the industry diminished. Instead of focusing primarily on cost reduction, CSCOs should emphasize GenAI’s ability to unlock new levels of productivity.

“Employees who gain access to GenAI tools soon experience a wide range of benefits, from improved decision-making to better skills development,” Berndt says. “GenAI then becomes supportive of retention as it improves the employee experience, and the company itself experiences associated productivity benefits.”

Misconception 2: career opportunities for young employees

As the second misconception, Gartner mentions that GenAI threatens employees at the beginning of their careers. Supply chain leaders indicate that most of the downsizing would come at the expense of this group of employees. For a discipline already struggling to attract and recruit new talent, this misconception will only make it harder to fill and maintain talent pipelines, according to the analyst firm.

“Instead of seeing GenAI as a threat to entry-level employees, CSCOs can tout their use of the technology as an effective recruitment tool,” Berndt explains. “The usage and accessibility of GenAI can be a powerful recruitment tool towards younger generations who see working with the technology as an employment benefit.”

Misconception 3: future job security

The third misconception, according to Gartner, is that GenAI interferes with employees’ lives. Supply chain organizations have been slow to communicate the impact of GenAI on the workforce, the analysts say. Without clear messaging, employees fill in the gaps from their own information sources, speculation and concerns about future job security.

“Even a sceptical CSCO with minimal plans for GenAI should communicate clearly the company’s plans for the technology and how it will affect the future of work,” Berndt states. “Employees are already drawing conclusions about it that are almost certainly more negative than what CSCOs would like.”

Future of work

Time will tell how GenAI will ultimately shape the future of supply chains. However, according to Gartner, CSCOs can already start taking steps to help steer its impact on their companies. First, they should communicate clearly and regularly about GenAI within the company. Next, they should shape the conversation about GenAI by experimenting with it.

In addition, according to Gartner, it is important for CSCOs to treat GenAI not only as a new technology, but also as a shift towards the future of work. That way, early enthusiasm about the technology can be leveraged to build awareness around basic GenAI skills and behaviours – such as how to develop and improve prompts, according to Gartner.