How to Use GenAI to Solve Today’s Supply Chain Challenges

The retail sector demands reliable, modern supply chain platforms to streamline operations, meet customer expectations, and achieve profitable growth.

This is easier said than done.

In 2025, retailers and their supply chain partners face numerous challenges, including tariff policies, geopolitical instability, trade disruptions, increasing demand volatility, the need for accurate forecasting, and the rising costs of raw materials and transportation.

Simply put, retailers face a complex supply chain reality marked by disruption and risk, making predictability (and profitability) difficult to develop.

As if arriving just in the nick of time, generative artificial intelligence (GenAI) has entered the scene with a vengeance, captivating supply chain leaders’ imaginations and promising to revolutionize how retailers navigate this complexity.

According to a comprehensive survey of 500 supply chain decision-makers, 97 percent of respondents say they're using GenAI. However, just 33 percent are leveraging the technology to enhance supply chain-specific outcomes.

In other words, there's a meaningful gap between AI ambitions and reality.

The GenAI Revolution and Reality

Despite the incredible enthusiasm for GenAI, a gap exists between adoption and strategic implementation.

Specifically, many brands and retailers lack concrete plans to deploy GenAI in supply chain-specific applications, making it difficult to mitigate risks and maximize the technology's potential impact.

Costs are one factor hindering GenAI adoption, with 60 percent of U.S. business leaders saying implementation costs are their biggest challenge. Meanwhile, other challenges, like data readiness, regulatory issues, and the ability to integrate GenAI into existing workflows, are slowing the technology’s impact on supply chain operations.

Some of this is caused by uncertainty. Leaders are unsure where to invest and what to expect from GenAI.

Retailers also cite barriers to GenAI adoption, including cost, data security concerns, and a lack of trust in the technology's output.

Even so, GenAI offers various potential use cases within the supply chain, including transportation and logistics, risk management, supplier management and procurement, data management, and inventory optimization.

How to Integrate GenAI Into Supply Chain Management Effectively

What’s needed is a practical framework for effectively integrating GenAI into supply chain management with all its strengths and limitations right now. Here are three principles retailers can apply immediately:

1. Start with high-impact areas.

When GenAI can do “everything,” achieving specific outcomes can be difficult. That’s why retailers should prioritize the application of GenAI to address heavy manual processes or areas where key performance indicators (KPIs) can be significantly improved.

For example, according to Logility’s survey, 100 percent of respondents said they have challenges with order fulfillment. GenAI can substantially improve forecast accuracy and on-time in-full (OTIF) delivery.

2. Leverage existing resources.

Many supply chain applications already have GenAI capabilities built in or readily available as add-ons. Retailers should explore and utilize these existing resources to expedite GenAI implementation.

3. Prioritize change management.

Successfully integrating GenAI into supply chain management requires more than just great technologies. It demands a focus on change management that ensures the team is aligned with the purpose and goals of the project and that there's a clear understanding of expected features, capabilities and results.

Making GenAI Work Right Now

The reality is that supply chain leaders are still building their strategies, and there's some good news to be found in that. The window for creating competitive advantage is still open, but not for long.

To meet the moment, retailers must prioritize high-impact GenAI applications, effectively use existing technology, and emphasize change management throughout their organizations.

GenAI’s potential is real. Those that convert it into real impact will be best positioned to outpace the competition in 2025 and beyond.

Jim Brown serves as senior vice president of business consulting at Logility, an Aptean company and leading provider of AI-first supply chain management solutions.