Value Chain Innovation: The Promise of AI

Value Chain Innovation: The Promise of AI

By
Hau L. Lee, Haim Mendelson, Sonali Rammohan, Lauren Blake
Value Chain Innovation Initiative. October
2018

Artificial intelligence has been touted as a technology with great promise for value chain improvements. This paper shares our understanding of how AI can improve various stages in the value chain, provides insight on how to design business strategies that leverage AI to create value, and raises important questions about the implications of an AI-driven future value chain.

Our research sheds light on the questions executives are asking themselves to determine where AI will deliver value to their organizations. We have learned that, while adoption and investment vary across industries, there is potential for AI to improve many functions, including product design, manufacturing, delivery, retail, and marketing. How companies deploy AI solutions involves defining a clear strategy around a business problem or opportunity in the value chain, determining an approach to developing AI solutions, cultivating data and human capital, and carefully managing the many risks AI can pose.