Podcast: How AI is reshaping supply chain planning and decision-making

Key takeaways

Supply chain leaders must align goals with C-Suite priorities to gain recognition and career growth.
Rising tariffs and depleted inventories may drive supply chain costs up 4–7% above inflation.
Top firms use AI and scenario planning to boost agility, scalability, and decision-making.
Walmart applies predictive and agentic AI to optimize inventory, speed processes, and cut waste.

In this episode of Great Question: A Manufacturing Podcast, Dave Blanchard, chief editor of Material Handling & Logistics and author of Supply Chain Management Best Practices, looks at how AI and other technologies are helping companies get smarter and more competitive with their supply chains. Learn what types of AI solutions retail giant Walmart is using to determine exactly what products its customers will want, and when they'll want them. You'll also find out why supply chain professionals need to get smarter at articulating the ROI of supply chain solutions.

Below is an excerpt from the podcast:

This time out, we’re going to take a look at some recent news centered on the profession of supply chain management, as well as how technology is helping companies stay competitive in a very volatile global market. So, let’s get started.

So first—how valuable are supply chain leaders? This isn’t really a news story so much as it’s the continuation of an issue that has bedeviled supply chain professionals ever since the supply chain first became a recognizable corporate area of focus.

Basically, chief supply chain officers tend to believe that they’re much more effective than their bosses think—which leads to the familiar problem: supply chain people aren’t being given the respect and recognition from the C-Suite that they think they deserve. How often have you heard a CEO or a CFO blame their quarterly shortfalls on supply chain issues? All the time, right?

But it’s very seldom, if ever, that you’ll hear a company spokesperson single out the great work done by all their logistics analysts—or highlight a warehouse manager who effectively got their products made and delivered in a timely manner. That kind of recognition just doesn’t happen.

So, in a recent survey conducted by Gartner, 75% of the respondents—these are supply chain leaders—gave themselves a score of at least 75 out of 100 when asked how effective they think they are in their positions. Same question, but when it was asked of the C-Suite, only about half of the respondents thought their supply chain leaders were as effective. So there’s a big divergence right there.

The Gartner study suggests that if you’re a supply chain professional who would like to be properly recognized for your efforts—not just recognition and appreciation, but in terms of real-world things like promotions, career advancements, and raises—then you should focus on three things.

First, find out what the C-Suite values most, and then prioritize your supply chain goals to align with those goals. That makes sense, right? Not easy to do, but it’s really a common-sense approach.
Second, supply chain professionals are known for collaborating with customers and suppliers. That spirit of collaboration should also be applied within your company. The more you can help enhance the performance of other departments in your organization, the more valuable they’ll see the supply chain team’s efforts.
And third, you need to learn to speak the C-Suite’s language—learn to articulate the ROI of the supply chain by explaining the impact of your technology investments and pointing out how effective your team is at supporting the organization as a whole.

OK, so in economic news—and I’m sure we’re all kind of up to our eyebrows in hearing about economic news—but there’s a real concern that the supply chain could experience a higher rate of inflation as soon as the fourth quarter of this year. According to a recent report from Kearney, the inventories that companies were stockpiling earlier in the year to get ahead of tariff deadlines are pretty much depleted. So now companies are facing the prospect of having to restock those inventories at much higher prices than earlier in the year.

The Kearney Supply Chain Navigator report says supply chain costs could rise about 2% above inflation. And it’s going to get worse when you add in things like tariffs, incentives, and other risk factors—which could see supply chain costs rising as much as 4 to 7% above inflation.

So what are companies doing to stay competitive? According to Kearney, top performers are using several strategies. For instance, they’re using scenario planning to stay aligned and responsive as conditions constantly shift. The more adaptive your network, the better you can pivot as needs arise.

Yes, companies are also using AI to improve speed, scalability, and decision quality. We’re not talking about the garden-variety chatbot type of AI. We’re not talking about search engines—we’re talking about industrial-strength AI that’s integrated into a company’s core business processes. The kind of AI that can anticipate, analyze, and adjust supply chain planning and execution.

And the third strategy that Kearney points out? That’s collaboration—we talked about that earlier. This is the type of collaboration that’s built on high-trust networks that can share data, coordinate planning, and respond quickly to supply chain disruption.

We’ll take a couple of those suggestions to heart. It seems to be what some of the top-performing companies are doing right now. Speaking of top-performing companies, let’s look at a company that historically has been one of the 800-pound gorillas when it comes to driving the adoption of supply chain technologies by its suppliers—that would be retail giant Walmart.

Yes, the same company that drove the adoption of EDI and RFID is now looking to AI to improve its retail supply chain process. Walmart, which has never really been shy about promoting its adoption of various tech solutions, recently gave an example of how it’s been using AI. They explained that produce is sorted by predictive AI in post-Eureka before sunrise, inventory can be rerouted to Mexico before the stores open, and orders are pre-assembled in Canada.

Walmart’s supply chain, the company also added, is increasingly unified not just by mission but by AI and machine learning. Thanks to its use of agentic AI for dynamic decision-making and optimization, Walmart can now complete some processes in weeks that used to take as much as three months.

So what are these technologies that Walmart is using? Some of them include proactive and predictive warehouse and transportation management systems—particularly when it comes to delivering fresh food products.

Another one is agentic AI. We talked about this a little bit earlier. Agentic AI is the latest buzzword, even though the basic idea of intelligent agents is at least several decades old. But Walmart is now using agentic AI to ask questions like: What items were shorted in specific stores? And then they’ll get back an answer as to why a store might have received less of a product than expected and, just as importantly, how they can correct that problem.

Another trend product is a solution that utilizes AI to monitor social media and internet searches to identify what kinds of products customers are talking about the most. Using that information, product development teams can quickly design the types of products people are asking about—and they can get them to market as quickly as possible.

And a particularly interesting solution is called self-healing inventory. It almost sounds like a medical term, but this technology allows Walmart to detect imbalances in stock levels, then automatically redirect product to wherever it’s needed the most. And it does all this before the stores even notice there’s an inventory problem.

You can be sure that if Walmart is using these types of technologies, other retailers are sure to follow. And with peak shipping season almost upon us, it will make for a fascinating case study to see how well the retail holiday season plays out later this year.

About the Podcast
Great Question: A Manufacturing Podcast offers news and information for the people who make, store and move things and those who manage and maintain the facilities where that work gets done. Manufacturers from chemical producers to automakers to machine shops can listen for critical insights into the technologies, economic conditions and best practices that can influence how to best run facilities to reach operational excellence.