While supply chain organizations have been adapting AI strategies, the majority still do not have a formal strategy. A new survey from Gartner found that just 23% of supply chain leaders report having a formal supply chain.
"CSCOs feel pressure to achieve short-term ROI from their AI investments, but they must ensure these quick wins don't create future constraints,” said Benjamin Jury, senior principal, research in Gartner’s supply chain practice, in a statement. "Without a structured approach, organizations risk creating inefficient systems that struggle to scale and adapt to evolving business demands."
Gartner surveyed 120 supply chain leaders who had deployed AI in their organizations within the past 12 months between December 2024 and January 2025. An analysis of the survey data revealed multiple disconnects between AI expectations and reality within the supply chain function.
Prominent among these disconnects was supply chain AI investment strategy, with most CSCOs focused on “project-by-project” short-term wins, rather than a defined AI investment strategy that ensures adequate funding to long-term, transformational investments.
This unstructured approach to AI investment poses a significant risk, as CSCOs may focus excessively on short-term returns, potentially undermining the long-term transformative potential of AI and resulting in misalignment with their CEO’s focus on using AI to drive growth.
Jury noted that the prevalent project-by-project AI investment approach often results in inefficient "franken-systems,” or complex, layered architectures that hinder scalability and extend the payback period for AI transformations. While the immediate gratification of short-term ROI may seem appealing, it frequently leads to marginal long-term gains and a fragile technical infrastructure.
Additional survey data revealed that supply chain leaders overwhelmingly use bottom-line metrics—such as efficiency, decision-making speed, and cost—to gauge the success of their AI investments, ranking these factors far ahead of measures such as increasing revenue and innovation. This suggests that CSCOs currently see AI primarily as an efficiency and cost-savings tool, rather than a truly transformative technology that can drive innovation and new business models.
Balance Supply Chain AI Investments
Without making principled bets on calculated, higher-risk projects with longer payback periods, supply chain leaders miss opportunities to truly transform their organization’s capabilities. Gartner advises CSCOs to develop an AI investment portfolio that balances short- and long-term priorities, ensuring that investments realize value quickly without neglecting transformational initiatives that will power the future supply chain organization.
To effectively balance AI investments among short-term wins and long-term transformational benefits, Gartner recommends the following strategies for CSCOs:
1. Develop a Formal Supply Chain AI Strategy: Establish a defined and documented AI strategy that outlines both short- and long-term objectives, what success looks like, and what needs to be done (and by when) to achieve that success.
2. Adopt the Run-Grow-Transform Framework: Build an AI investment portfolio that includes "run," "grow," and "transform" projects to strategically allocate resources and deliver immediate operational efficiencies, as well as mid- to long-term benefits.
- Run Phase: Focus on enhancing operational efficiency and cost optimization through AI-driven automation and predictive maintenance.
- Grow Phase: Foster cross-functional alignment and enhance decision-making capabilities by integrating AI into key processes, such as sales and operations planning.
- Transform Phase: Make principled bets on AI initiatives that position the supply chain as a strategic partner in business growth, leveraging AI for consumer insights and proactive demand shaping.
3. Invest in AI-ready Infrastructure: Ensure scalability and adaptability to meet evolving business demands, in collaboration with the CIO and other executive leaders.
