Clearly, the pressure is on to deploy AI in the supply chain. Nearly two-thirds (61%) of companies believe their competitiveness will be seriously impacted if they can’t scale AI within their operations in the next year.
But the results of Redwood’s recent Customer Advisory Board (CAB) survey — detailed in our new AI in Logistics Report — highlight the challenges of getting there. While 37% of our CAB members have identified AI as a top investment priority, only 13% have achieved a quantifiable return on AI. A full 40% of survey participants haven’t even launched a pilot of AI in their supply chain yet.
Why are so few logistics teams successfully adopting and scaling AI? Based on our work with hundreds of shippers, we believe the answer is simple: Most logistics teams haven’t created the right foundation for AI success. They’re attempting to install AI on top of an outdated infrastructure that wasn’t designed to support it. The results include failed pilots, stalled roadmaps, and a lack of quantifiable ROI.
In our AI in Logistics Report — and in this five-part companion blog series — we’ve defined four pillars for AI success. We’ve already covered three of those pillars in previous blog posts:
We believe the fourth pillar is the most overlooked prerequisite for AI success: Change management, AI governance, and workforce readiness. In our CAB survey, 11% of respondents noted the importance of organizational change management in increasing AI adoption.
Recent findings from Prosci are even more dramatic, revealing that 63% of AI implementation obstacles arise from human factors, not technical challenges. Prosci’s research found that trust in AI drops dramatically in most organizations in direct relation to the org chart. While executives are enthusiastic and team leaders are cautiously optimistic, frontline workers are downright skeptical when it comes to AI.
Your team doesn’t trust AI. You need to demonstrate the benefits.
There’s a reasonable explanation for this. Many employees mistrust AI because they fear it will eliminate their own jobs. That’s because so much of the early hype about AI focused on headcount reduction and cost savings — a “brave new world” where AI replaces humans. While that perception is far from true, your AI implementation will never succeed unless employee misconceptions are first addressed.
Effective change management means creating a more accurate view of AI for your team, and communicating that truth consistently. Leaders need to demonstrate the everyday benefits of AI, as well as its longer-term payoff. Leaders also need to train and upskill team members for their new, higher-value roles, while at the same time acknowledging and addressing their concerns.
While embedded AI agents will become virtual team members, your workers will still need to manage these agents — defining their jobs, governing them, monitoring their outputs, and intervening as needed. That’s an exciting proposition, and communicating it effectively helps create ownership and buy-in.
Cultural transformation becomes easier as AI grows and scales. Your team members will understand how AI enhances speed, accuracy, and productivity firsthand as they transition from manual to automatic load-building and other tasks. They’ll appreciate the importance of governance as they develop and apply override protocols. And they’ll be able to train and steer AI, improving supply chain performance continuously over time.
Explainable AI is key in winning over the workforce.
Gaining employee buy-in also depends on ensuring that AI is always transparent, always explainable. When AI pilots fail to scale, it’s often because the logic behind decisions isn’t made clear. The result? Planners fail to trust and execute AI decisions, instead performing manual analysis or using their intuition. Because AI far exceeds human cognition, their decisions fall short of the potential outcomes enabled by AI.
This problem is all too common in Redwood’s experience: A new technology works, but the human workforce has not been prepared to trust it. Adoption fails not because the AI made the wrong decision, but because no one explained how it made the right one.
For example, AI might choose a certain carrier or route based on enormous volumes of insights that aren’t immediately visible, or that are simply too large to be processed by humans. That route or carrier might be rejected because it seems “wrong.” But, by overriding the AI decision, your team members are losing time, eroding profits, and damaging customer relationships. And AI’s true power to deliver an ROI is being limited.
Making logic transparent is one key, but you also need to establish clear AI rules and protocols. A carefully defined AI governance system ensures humans are managing AI and its outcomes, not rejecting or duplicating its work. Team members must transition from managing people and tasks to managing the outputs of AI — and that’s a big change for any organization.
Redwood excels at both digital and cultural transformation.
Achieving both an AI transformation and a significant organizational change might seem like a tall order — especially under the time pressures you’re feeling. As a modern 4PL, Redwood stands ready to help.
The Redwood team consists of both technology experts with special strengths in AI and operations experts who understand supply chain roles, skillsets, and training needs. When you partner with Redwood, the job of addressing both digital and cultural issues is shared — and you don’t need to add internal resources or new team members to master the AI transition.
With firsthand experience in change management, Redwood can assume responsibility for all operational and cultural aspects, including creating and communicating new roles, AI governance policies, work distribution plans, and override protocols. Redwood’s team has expertise in not only applying AI, but also making its objectives and outputs clear. We make sure all AI decisions are transparent and explainable, which increases your team’s trust.
The simple truth is that human team members aren’t casualties of AI, they’re beneficiaries of AI. Your team members will be elevated to higher, more strategic roles in managing AI. And they’ll enjoy greater job security over the long term because of the financial ROI driven by AI, which makes the entire supply chain stronger, more resilient, and more profitable.
The power of AI is real. The time is now.
As Redwood has seen firsthand, the potential of AI to transform your supply chain is incredible. The technology is here. You just need to overcome cultural resistance and the other three infrastructure challenges we’ve defined in our AI in Logistics Report.
Close the gap between AI ambition and real ROI by partnering with Redwood to first create a foundation for AI success, then deploy specific AI agents across your operations. We uniquely understand both aspects. And we’re committed to building an AI capability in your supply chain that becomes self-sustaining as your team members embrace AI, develop new skillsets, and take on more strategic roles.
Most organizations believe the next 12 to 18 months are critical in getting AI beyond the pilot stage, to fully scale and deliver ROI across the supply chain. Why not contact Redwood today to accelerate and amplify your own AI transformation?