Blue Yonder: AI and Sustainability Top of Mind for Leaders

In a landscape marked by constant market disruptions, supply chain leaders are prioritising strategies that focus on enhancing resilience, agility and speed.

Blue Yonder's inaugural Supply Chain Compass report surveys nearly 700 senior supply chain executives from the manufacturing, retail and logistics sectors across North America and Europe. They emphasise three central priorities: implementing modern technology (51%), increasing efficiency and productivity (40%) and fortifying resilient supply chains (29%).

Procurement teams are on the frontline of dealing with supply disruptions. Building resilient supply chains—through investments in technology, better demand planning and end-to-end visibility—aligns with procurement’s mandate to ensure reliable supply, even during geopolitical, economic or climate-driven shocks

The breakdown of these goals into actionable steps highlights that nearly half (46%) of participants view improved demand planning and swift access to performance data as vital in meeting strategic objectives. An additional 45% identify the necessity of tracking and visibility tools, with 41% focusing on transforming digital software and 33% concerned with cost control.

These insights underscore a growing recognition within supply chain of the pressures exerted by volatile macroeconomic factors, as well as the essential tools required for effective management.

Andrea Morgan-Vandome, Chief Innovation Officer at Blue Yonder, says: "A consistent theme among surveyed leaders was the adoption of innovative solutions that deliver true end-to-end visibility across the supply network and enable a more connected, intelligence-driven approach to demand and supply planning."

Emphasis on technological advancements

Technology is repeatedly cited as a crucial catalyst for change. Approximately 74% of supply chain leaders concur that AI is already transforming business operations, despite 82% acknowledging that outdated systems continue to impede their supply chains' full potential.

This belief in technology stimulates action, with more than half (51%) of leaders placing new technology implementation as their primary strategic focus for the upcoming three years.

The readiness to invest is robust, with nearly 89% having allocated budgets specifically for supply chain technology and 61% planning expenditures between US$1m and US$10m over the next five years.

Modernisation of procurement processes is critical, enabling better supplier collaboration, real-time risk visibility and automating routine sourcing and purchasing tasks. Outdated systems are seen as a major barrier, so tech investment is not just a supply chain issue—it’s a procurement one as well.

Such financial commitments reflect confidence that digital solutions can successfully navigate market instability and enhance operational efficiency.

Generative AI, however, has not yet become widespread. While 83% of respondents are utilising or implementing automation through traditional AI and 78% employing machine learning, only 36% have adopted generative AI, indicating cautious but increasing interest.

For organisations opting out of generative AI, various reasons are cited. About 51% favour a people-centric approach over emerging technologies, while others point to costs as a deterrent, especially for companies with technology budgets under US$500,000. Some firms prioritise other near-term objectives, such as optimising inventory automation.

Generative AI adoption varies among sectors. Companies engaged in transportation, order management and fulfilment are more inclined to experiment with or plan its implementation (46%), while only 16% of logistics operators do not foresee its use.

Sustainability integration

Beyond technology, sustainability has become a core aspect of supply chain leadership's future outlook. Surveyed leaders most frequently describe future supply chains as "sustainable", with 68% asserting the responsibility of operators to tackle environmental challenges such as waste and climate change.

For those who rank sustainability among their top three strategic priorities, the outlook is distinctly optimistic, combining operational enhancements with strategic technology choices.

Initial sustainability initiatives concentrate on physical measures, such as sustainable packaging (37%), reducing manufacturing waste (30%), recycling (28%), transitioning to green fuels and renewable energy (28%) and minimising warehouse emissions (27%).

Despite a less prominent role, technology-driven sustainability is emerging, with 22% utilising data analytics for emissions tracking, 17% deploying connected networks for efficient shipping and 13% utilising technology to minimise waste from expired inventory.

Performance data and advanced analytics directly impacts procurement’s ability to assess supplier performance, optimise sourcing decisions and respond quickly to market changes—capabilities increasingly critical as procurement shifts from transactional to strategic.

Even so, advancements are evident. About 26% of industry leaders believe forecasting technology can concurrently enhance efficiency and achieve sustainability goals, demonstrating a clear link between digital tools, cost reduction and diminished environmental impact.

Organisations prioritising sustainability tend to exhibit more advanced technology adoption. For instance, 94% of these leaders consider end-to-end data connectivity fundamental to success, compared with 85% of the broader group. Moreover, four in five leaders confirm that AI is already influencing their operations, with 61% actively exploring generative AI.

With sustainability now central to supply chain strategy, procurement teams are responsible for sourcing materials and partners that meet environmental and social governance criteria. Technological advances (AI, data connectivity) are being leveraged to track and reduce environmental impact, an area where procurement choices have direct consequence

"The intersection of technology and sustainability presents a promising opportunity," emphasises Saskia van Gendt, Chief Sustainability Officer at Blue Yonder.

"Leaders who prioritise sustainability are leveraging advanced technologies such as AI and data connectivity to enhance efficiencies and reduce environmental impact. By embracing these innovations, we can transform our supply chains into powerful engines of sustainable growth."