As automation accelerates across supply chains, human expertise is proving indispensable for tackling the unpredictable and complex. While AI efficiently handles routine tasks and processes large volumes of data, the human capacity for critical thinking and strategic decision-making sets the course for long-term success. However, the most effective supply chains strike the right balance between automation and human judgment, using AI for efficiency while empowering human leaders to navigate the unforeseen.

AI’s Strength in Automation

AI excels in tasks that involve repetitive actions and data-heavy processing. For example, AI systems can handle tasks such as generating purchase orders or posting vendor invoices at a speed and accuracy level far beyond human capability. These “micro-decisions,” which are rule-based and operate within predefined parameters, free up human workers from the drudgery of manual operations. By automating routine processes, supply chain experts are empowered to concentrate on areas that demand contextual awareness, intuition, and long-term planning.

While AI can easily analyze millions of data points and identify patterns, its effectiveness is often limited by the quality and availability of the data it has been trained on. This means that in situations where clear historical data is lacking or when unusual circumstances arise, human intelligence becomes indispensable. AI can provide insights and suggest possible courses of action. Still, it’s the human ability to weigh competing factors and make judgment calls that ultimately drives success in complex supply chain scenarios.

Strategic Decisions Require Human Judgment

The complexity of modern supply chains, influenced by factors such as global trade regulations, environmental sustainability, and fluctuating demand, often requires a level of judgment that AI systems are simply not equipped to provide. For example, category managers dealing with limited resources, such as printed circuit board assemblies (PCBAs), must navigate a myriad of variables, including shifting tariffs and supply disruptions. In such cases, AI serves as a co-pilot, offering data-driven insights and evaluations that support human decision-making, but it cannot replace the strategic vision required to steer through these complexities.

One significant advantage humans have over AI is the ability to make decisions with incomplete information. Supply chain leaders often face situations where a clear, data-backed solution does not exist. Here, human decision-makers must rely on experience, intuition, and an understanding of broader business goals to chart a course forward. This big-picture perspective enables supply chain leaders to respond effectively to disruptions or emerging opportunities that AI might not fully grasp.

Balancing AI and Human Input

The most effective supply chains in the future will strike a balance between automation and human oversight. Following the Pareto principle, or the 80/20 rule, AI will likely manage 80% of the high-volume, low-complexity tasks, leaving humans to focus on the 20% of decisions that are more complex, nuanced, or strategically significant. These human-led decisions often involve exceptions to established rules or sudden, unplanned events that require quick thinking and adaptability — qualities AI lacks.

For example, in a quality control scenario, AI can identify potential issues by analyzing data across multiple touchpoints in the supply chain. It may even suggest potential remedies, but when a major issue arises — such as a product recall — human leaders must step in. These leaders use AI’s data analysis as a foundation to develop a comprehensive action plan, taking into account factors like customer impact, brand reputation, and future risk mitigation. AI then helps implement the plan by coordinating with suppliers and ensuring that corrective actions are communicated and executed efficiently.

Human-AI Collaboration: A Future-Ready Supply Chain

The future of the supply chain will increasingly rely on the complementary strengths of AI and human intelligence. AI’s ability to manage vast amounts of data and execute routine tasks is unmatched, making it an essential tool in optimizing day-to-day operations. However, AI’s utility is constrained by its dependence on structured data and predefined rules, meaning that in the face of ambiguity or unprecedented challenges, human intelligence is irreplaceable.

AI systems may excel at pattern recognition and forecasting based on historical data, but humans are better equipped to manage exceptions and address the uncertainties that arise in real-world scenarios. For instance, when responding to unpredictable disruptions like a global pandemic or geopolitical events, supply chain leaders must consider the available data and the broader implications for the business and the market. AI can assist in providing insights, but human leadership crafts the strategy and ensures that the supply chain adapts in a way that aligns with long-term business objectives.

Moreover, as supply chains increasingly emphasize ethical decision-making, sustainability, and transparency, the human element becomes even more critical. While AI can analyze data related to these factors, human judgment ensures that decisions align with organizational values and ethical standards. The ability to balance financial performance with broader social and environmental responsibilities is a uniquely human capability — one that no algorithm can replace.

Automation may streamline many processes, but human intelligence remains irreplaceable in handling complex and unpredictable challenges. The most successful organizations will be those that harness the power of AI to optimize routine tasks while empowering their teams to make high-level strategic decisions. When humans and AI work together, companies can build stronger, more adaptable supply chains capable of thriving in the face of modern challenges.

Sebastian Ennulat is Senior Partner & European Head of Wipro Supply Chain Consulting.