In recent discussions around the future of supply chains in Asia, a common theme emerges: the potential of generative artificial intelligence (GenAI) remains largely untapped. Despite the extensive promises that GenAI holds for enhancing operations, recent reports indicate that its adoption in supply chains across the region languishes at an alarming 7%. This article examines the barriers to implementation and the implications for businesses hoping to harness the power of GenAI.
Atul Chandna, the EY Asia-Pacific Supply Chain Leader, shared insights during the latest edition of Transformation Insider that highlight a critical disconnect between intent and action. While 73% of executives signal plans to onboard GenAI technology, the actual integration into supply chain operations has remained minuscule. This disparity raises concerns as businesses risk falling behind in an increasingly competitive landscape. “The shift from traditional AI to GenAI promises demand forecasting and real-time disruption solutions, but many projects falter due to complex rollout challenges,” Chandna warned.
The operational advantages of fully autonomous supply chains are clear. Early adopters of GenAI are witnessing significant efficiencies, suggesting that with committed investment, the potential rewards may far outweigh initial hurdles. Companies willing to invest in GenAI stand to gain a competitive edge and improve their overall functionality, something that cannot be overlooked in today’s market.
The lag in GenAI adoption can partially be attributed to challenges associated with implementation. Supply chain transformations often involve substantial changes to infrastructure, systems, and human resources. Organizations may encounter difficulties in aligning the new technologies with existing workflows, which can result in inertia among decision-makers. Ensuring that all stakeholders are on board and educated about the benefits of GenAI is crucial for overcoming these obstacles.
In parallel to the supply chain trends, the subscription economy in Asia reflects a contrasting resilience, thriving even amid consumer fatigue. Erik Almadrones, EY Asia-Pacific Consulting Customer & Growth Leader, noted that 81% of consumers in India and Southeast Asia express a willingness to embrace more subscription offerings—provided these are centralized and provide real value. Businesses targeting this demographic are finding success by presenting distinctive benefits and transparent pricing.
The subscription model’s rise highlights a broader trend towards customization and AI-driven personalization. These shifts particularly affect high-value items, where consumer expectations for personalization escalate. The success of customizable plans and exclusive incentives points to a lucrative area for investment, diverging from traditional revenue streams. Companies hesitant to adopt new technologies may miss out on this growing market segment.
Examining workplace dynamics, Shinichiro Uzawa, EY Asia-Pacific People Consulting Leader, reported that GenAI use among employees surged from 22% to 75% since 2023. This rapid adoption indicates a clear interest in exploiting technology to enhance productivity and skills development. However, it’s important to understand the correlation between GenAI deployment and employee retention. The rise in quit intent by 4% among employees signals that organizations must also focus on tailored rewards and growth opportunities to retain top talent. Only 30% of companies have achieved a “Talent Advantage,” underscoring the need for strategic alignment across GenAI initiatives, company culture, and rewards systems.
Moreover, Japan’s luxury sector presents a compelling case study for GenAI’s application in enhancing customer experiences. By shifting from traditional sales methods to AI-driven practices in customer relationship management (CRM), luxury brands are refining their sales training and client engagement processes. This illustrates how different industries can harness modern technology to meet evolving consumer expectations effectively.
As businesses consider the foray into GenAI, they must not overlook the ethical implications of technology use. EY’s Responsible AI Principles promote accountability, data protection, and reliability. Aligning GenAI strategies with these principles helps build consumer trust and mitigates potential biases in AI-generated outcomes.
The slow integration of GenAI into Asia’s supply chains poses a considerable challenge for companies looking to maintain a competitive edge in the market. As industry leaders recognize the potential of GenAI, there is a pressing need to bridge the gap between intent and action. By addressing implementation challenges, fostering a culture of innovation, and prioritizing consumer needs, businesses can effectively leverage GenAI to transform their operations and secure long-term success.