What Manufacturers Can Gain from Autonomous Supply Chains

For those of us who, like me, have been working in manufacturing for more than three decades, technological leaps are a given. But there is something significant about the shifts AI has begun to introduce into the realm of manufacturing supply chains. Most notably in how it enables established technologies to perform in ways only now emerging. 

Think of today’s most modern supply chain as a car on cruise control. It automatically maintains a set speed, but you still need to steer it and put on the brakes. By contrast, an autonomous supply chain is like a self-driving vehicle requiring minimal to no input from its driver. Whether it is procurement, warehousing or maintenance planning, AI agents make the decisions and perform tasks with minimal human intervention, at an incredibly fast pace. 

How autonomy benefits manufacturers

Given the capabilities of autonomous technologies, it’s no wonder companies expect more autonomous supply chains to drive value for them, as we have found in our recent research: 

• Industrial equipment manufacturers see opportunities for reducing the time to recover from disruptions by 58%. 
• Higher degrees of autonomy in supply chains could slash order lead times in the automotive industry by 26% and boost productivity in the aerospace and defense sector by 25%. 
• Companies across industries expect a 5% increase in EBITA and 7% improvement in return on capital employed from increased supply chain autonomy. 

This research also provided insights into the current state of supply chains. On a scale from 0 to 100 (i.e., human driven to fully autonomous) the median scores of the discrete manufacturing industries range between 17 for industrial equipment manufacturers and 24 for automotive manufacturers.  If you look at this from the car analogy mentioned earlier, most supply chains would be  considered horse carriages. 

Industrial equipment manufacturers are particularly keen on changing this. Two in five (39%) stated that autonomous supply chains are a key priority for them, in which they are now heavily investing.

But where exactly should these investments go? Our research points to three critical areas: data, AI-enabling technology and the intersection of people and technology.

Data investments

Autonomous processes require reliable, consistent data. However, what may surprise many manufacturers is that the effort to get the data right is much less than that required for other technology programs, such as an ERP implementation. Companies don’t need to spend years building the perfect digital core before they can get started on building autonomy into their supply chains. We have already seen several client projects in which focusing on getting a few key data elements right delivered significant business outcomes. 

To understand how this can work, manufacturers can take a page from the book of a global high-tech company. Its supply chain teams used to make thousands of inventory decisions based on fragmented data and inconsistent processes that slowed their response to shortages. Then the company built a decision intelligence system that automatically diagnoses shortages and excess inventory, determines optimal replenishment strategies and writes decisions back to source systems. The system now orchestrates thousands of decisions, which has significantly improved the company’s labor productivity, distribution efficiency and response time.

AI investments

While autonomy begins with automation based on data, it only comes to life if manufacturers upgrade their legacy technology to newer systems that enable modern AI applications. Among those are AI agents to manage routine jobs, connect data and oversee processes. Here, companies should start with an eye toward scaled implementation. Small pilot programs help ensure agentic AI applications are mature enough. However, testing too many ideas in pilot mode will get in the way of successful scaling.

And because supply chains are attractive targets for cyber threats, strong cybersecurity at every stage of the value chain is essential. Comprehensive security protocols, such as supplier security audits and advanced multi-factor authentication help ensure data and systems remain secure against increasingly sophisticated threats.

People and technology investments

People are crucial to making autonomous supply chains work. Employees need to be included early, trained to adapt and supported by leaders who foster trust. Upskilling, clear communication and involving internal influencers help teams accept novel technologies. 

Underlining the importance of people is the fact that only 1% of respondents expect a significant decrease in staffing. In the most effective autonomous systems, humans are “on the loop.” Autonomous systems will sense and respond, while humans will provide feedback and optimize outputs.

Quick wins in procurement

Procurement is a prime candidate for autonomy in supply chains for two reasons. First, many tasks in this domain are repetitive and predictable. AI agents can help manage supplier relationships smarter and optimize design-to-cost. They can also  make spare parts procurement more efficient by retrieving specifications from old user manuals for maintenance, repair and operations negotiations.

Second, our data shows that manufacturers’ autonomy is lowest in operational and strategic purchasing activities. Operational purchasing autonomy in industrial equipment supply chains is at a mere 9% and just 15% in automotive supply chains. This means manufacturers are in for quick wins here from time savings, reduction of errors, efficiency gains in purchase requisitions, order processing and even negotiations.  

Because supply chains and their domains are so process- and data-driven by nature, they provide the ideal use case for more autonomous — and thus, faster and more efficient — decision-making. This crucial decision is now in the hands of manufacturing leaders. They should go for it.  

Sam Paul is the senior managing director leading Accenture's US Industrials Industry Group.

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