Businesses are aggressively investing in AI across supply chains as a counterweight to inflation and trade volatility, but a growing execution gap threatens to derail their efforts, according to a report by Relex Solutions, which operates a unified platform for retail, manufacturing, and supply chain planning.
Although 60% of surveyed companies are prioritizing AI and automation investments, 44% can’t find the specialized talent needed to implement the technologies, noted Relex in its second annual State of Supply Chain 2025: Balancing Inflation, Investment & Innovation report. Some 43% of retail, manufacturing and wholesale professionals surveyed for the report indicated their companies struggle with budget constraints limiting their ability to scale AI initiatives; and 39% are thwarted by poor data quality.
The report identifies generative AI (selected by59% of those surveyed, predictive AI (43%) and cloud-native solutions (34%) as the top technology investment priorities, with most companies allocating up to 20% of their technology budgets to artificial intelligence-driven solutions despite market volatility.
Inflation is reshaping how companies do business, the Relex report indicated. For example, 31% of retailers said they were optimizing operations, and 31% are adjusting pricing to stay competitive. For 59% of retailers surveyed, rising prices have led them to grow their own-brand portfolios as consumers seek value. Six in 10 of companies surveyed were fundamentally restructuring their supply chains, Relex reported, with 52% citing demand volatility as their primary challenge and 47% concerned about tariff uncertainty and trade disruptions.
“Today’s supply chain leaders face a dual challenge: They must innovate through technology while adapting to economic pressures,” said Madhav Durbha, Relex group vice president of manufacturing Industry strategy. “The gap between AI’s potential and its practical implementation represents both the greatest risk and opportunity in supply chain transformation today.”
