Why Supply Chains Leaders Are Still Underutilizing AI

Supply chain and warehouse operations have never had more powerful technologies at their disposal. Autonomous mobile robots, spatial computing, agentic artificial intelligence and real-time inventory intelligence have converged into a new class of physical AI which promises to reshape fulfillment, distribution and logistics from the ground up.

Yet for most organizations, the gap between what these systems can do and what they’re actually delivering remains wide.

According to research from Open Sky Group, 94% of supply chain companies plan to use AI or generative AI for decision support within two years, yet only 23% have a formal AI strategy in place. Adoption is accelerating; execution is lagging behind. The reason is rarely the technology itself.

Spatial AI and Agentic Systems

Spatial AI gives machines the ability to perceive and navigate physical environments in three dimensions, in real time. In a warehouse or distribution center, this means autonomous systems that can map facility layouts dynamically, respond to shifting inventory positions, coordinate with human workers, and adjust routing logic without manual reprogramming. Paired with agentic AI, which pursues multi-step operational goals autonomously, the result is a distribution environment capable of self-optimizing across receiving, putaway, picking, packing and outbound logistics simultaneously.

The appetite for this kind of intelligence is clear. A 2025 ABI Research survey found that 76% of supply chain professionals see strong potential for autonomous AI agents to handle tasks such as reordering and shipment rerouting, and 94% of companies plan to use AI to assist with decision-making across their operations. The strategic intent is there. What consistently gets in the way is implementation discipline.

The Problem Beneath the Surface

In supply chain and warehouse environments, data is generated constantly, from warehouse management systems, transportation management platforms, ERP systems, barcode scanners, RFID readers and sensor networks. The volume creates an illusion of data richness, but the reality is often the opposite. Raw operational data collected across these sources is rarely standardized, consistently timestamped, or mapped to the real-world events it’s meant to represent.

When AI systems are trained or operated on poorly contextualized data, the outputs reflect those gaps. A demand-forecasting model fed inconsistent inventory data will generate replenishment signals that either overstock slow-moving SKUs or leave fast-moving items short. A routing optimization engine working from inaccurate location or capacity data will produce plans that look efficient on screen but fail on the dock. The problem lies with the data feeding the model.

Data contextualization, standardizing inputs and anchoring them to verifiable operational events are the foundational work that determines whether AI generates genuine insight or misleading noise. They’re also the work that’s most frequently underestimated during technology evaluations.

Fragmented Systems

Supply chains are inherently cross-functional. A decision made in procurement affects warehouse capacity. A disruption in inbound transportation changes pick priorities. A change in customer order patterns reshapes outbound scheduling. When the systems managing these functions operate in isolation, each team is working from an incomplete version of reality, and AI agents operating within those silos will optimize locally at the expense of the broader network.

Moving toward a unified data layer, a single source of truth that connects inventory, order, transportation and supplier data in real time, is what enables AI to make decisions that actually improve end-to-end performance. According to Accenture research, companies with AI-mature supply chains are 23% more profitable than their peers. That profitability comes from deploying AI tools on top of integrated, trustworthy data infrastructure.

Achieving this integration demands organizational commitment to retiring or bridging legacy systems, establishing shared data standards across business units, and maintaining governance over data quality on an ongoing basis. The technical lift is real, but the harder challenge is sustained operational discipline.

Designing for Disruption

Supply chains are defined by variability. Carrier delays, supplier shortfalls, demand spikes, labor shortages, weather events, and geopolitical disruptions are routine. A recurring failure mode in AI deployment is building systems that perform well under normal operating conditions but break down precisely when they’re needed most.

This concern is reflected at the leadership level. The Hackett Group reports that economic uncertainty is a top concern for 75% of supply chain leaders, with agility and resilience ranking among their highest priorities for 2025. An AI system that optimizes for efficiency under stable conditions but has no logic for exception handling will create compounding failures when volatility arrives.

Effective exception handling must be treated as a core design requirement. Systems need to recognize when they’re operating outside familiar parameters; communicate that uncertainty clearly to operators, and escalate appropriately rather than producing a best-guess output that gets acted on without scrutiny. In a fulfillment environment, a wrong autonomous decision, misrouted shipment, incorrect inventory adjustment or unplanned carrier substitution can ripple across the network within hours.

Human-in-the-Loop

Human-in-the-loop design is often viewed as a temporary bridge to full autonomy, but in high-stakes environments like supply chains, it serves as essential, permanent infrastructure. Rather than limiting AI, this governance model strategically assigns high-frequency, data-intensive tasks — such as slotting and replenishment — to the machine, while reserving human oversight for novel or consequential decisions to ensure reliability and accountability.

To make this structure effective, organizations must establish explicit escalation and approval protocols. Without clear guidelines on when an AI should proceed, pause or alert a human, companies risk two primary failure modes: over-escalating to the point that efficiency gains are negated, or failing to escalate often enough, which allows errors to accumulate unnoticed.

Supply chain and warehouse leaders who are seeing consistent returns from spatial and agentic AI investments tend to share a common approach. They treat data infrastructure as a prerequisite. They pilot in bounded environments — a single distribution center, specific product category, or defined carrier lane — before scaling, which allows exception handling to be stress-tested under realistic conditions. They involve operations teams in defining escalation protocols rather than delegating that design to technology vendors. And they measure outcomes at the network level, not just within individual nodes.

Dijam Panigrahi is co-founder and chief operating officer of GridRaster.