Incorporating generative AI into your company’s technology strategy – MIT Sloan News
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Ideas Made to Matter
Artificial Intelligence
By
Beth Stackpole
At food service company Sysco, generative artificial intelligence is another tool that optimizes sales, processes, and supply chains.
Companies already focused on adopting and effectively using digital tools and technologies are now figuring out how generative artificial intelligence fits in.
At Sysco, a food service company with $76 billion in sales in fiscal year 2023, generative AI is another tool that can help with optimizing sales, operations, supply chain performance, merchandising, and product assortment.
Tom Peck, an executive vice president and chief information and digital officer at Sysco, discussed how the company is using generative AI during a recent webinar with MIT Sloan principal research scientist
“Digital technology, AI, and generative AI are not just pervasive in our business, they are really driving our transformation,” Peck said. “Upwards of 80% of orders are now customer-placed, and data from AI is driving those upsell, cross-sell shopping experiences as opposed to more transactional reorders.”
“Where there’s information, where there are processes connecting with customers and operations, there’s an opportunity to apply some AI,” Westerman said.
The two discussed Sysco’s key use cases for generative AI, best practices for implementation, and how generative AI fits into the company’s broader digital strategy.
While Sysco has been using traditional AI and machine learning for some time, the company is still experimenting with generative AI use cases.
Currently, its efforts are supporting two primary areas:
Sales and support: Sysco maintains nearly 2 million SKUs, about 200,000 of which are in high demand among customers. The firm has been leveraging traditional AI and analytics to make product recommendations, but generative AI can incorporate unstructured data, such as images or social media data, to capture additional signals. “This will help us be even more creative feeding the shopping cart for our customers,” Peck said. “We are starting to see bigger shopping carts and higher margins by turning traditional AI into more generative AI.”
Sysco also aims to enable a smarter, more proactive call center. This includes leveraging generative AI to perform sentiment analysis, which involves analyzing data about customer state of mind to help build more effective scripts for representatives to use during support calls.
On the sales side, the company is also using generative AI for call planning, by having it suggest and automate next-best actions for team members. Generative AI can also aid in menu curation, helping to develop and circulate carefully chosen images that inspire customers to buy additional products, as well as in customer segmentation, to help sales professionals better target offerings. “It’s a great way to make our teams more effective and get the right product to delight the customer,” Peck said.
Supply chain: Any warehouse operation, especially in the food industry, is dependent on data and algorithms to move and track product efficiently. In that vein, Sysco is using AI and generative AI to manage inventory, optimize warehouse logistics, and route customer deliveries more efficiently. One example is intelligent substitutions, which means using AI to suggest alternative products when something is out of stock or delivery is impacted by a weather event. Smart routing uses onboard telematics to better manage the company’s 14,000-truck fleet by using information about weather conditions, traffic, and onboard temperature zones in vehicles for more dynamic routing. Generative AI can also guide optimal product picking in the warehouse, and truck loading.
“What’s new here is the data outside of a traditional structured database that can feed a more predictive and more prescriptive route so we’re getting more pieces picked per pallet or more trucks loaded faster,” Peck said. “Ultimately, it’s about running a smarter warehouse.”
Peck made the following recommendations for companies looking to evolve their use of generative AI.
Integrate generative AI into broader technology strategy. At Sysco, AI and generative AI are components of a broader automation strategy, Peck said. Most business cases can be solved with robotic process automation, bots, or traditional AI. If those technologies can’t solve the problem, it’s time to consider building something using generative AI capabilities, he said. “I don’t need a generative AI strategy,” Peck said. “I need an automation strategy.”
Consider buying versus building. Sysco opts to purchase AI capabilities such as robotic process automation bots and tools before building its own large language models because Peck prefers the capabilities to be part of a native tool set. “We’ll buy and leverage what we already have, and then, if we have to, we will go to one of the technology providers,” he said.
Understand roles and talent. Sysco views generative AI as a productivity enhancer for humans rather than as an employee replacement. Instead of creating a formal AI team, Sysco trains and teaches employees new skills and makes sure people have the right tools at their disposal, Peck said. “Don’t underestimate the talent you already have,” he said. “I would rather take an internal employee who’s engaged and talented and teach them the skills to become an AI architect or developer.”
CIOs can take a leadership role. Most CIOs or chief information and digital officers are business savvy and play a leading role in driving transformation and business process improvement, Peck said. Generative AI is another opportunity for them to step up and play an influential role.
Watch the webinar: Preparing your organization for a generative future
The mission of the MIT Sloan School of Management is to develop principled, innovative leaders who improve the world and to generate ideas that advance management practice.
This article was autogenerated from a news feed from CDO TIMES selected high quality news and research sources. There was no editorial review conducted beyond that by CDO TIMES staff. Need help with any of the topics in our articles? Schedule your free CDO TIMES Tech Navigator call today to stay ahead of the curve and gain insider advantages to propel your business!
Through intellectual rigor and experiential learning, this full-time, two-year MBA program develops leaders who make a difference in the world.
A rigorous, hands-on program that prepares adaptive problem solvers for premier finance careers.
A 12-month program focused on applying the tools of modern data science, optimization and machine learning to solve real-world business problems.
Earn your MBA and SM in engineering with this transformative two-year program.
Combine an international MBA with a deep dive into management science. A special opportunity for partner and affiliate schools only.
A doctoral program that produces outstanding scholars who are leading in their fields of research.
Bring a business perspective to your technical and quantitative expertise with a bachelor’s degree in management, business analytics, or finance.
A joint program for mid-career professionals that integrates engineering and systems thinking. Earn your master’s degree in engineering and management.
An interdisciplinary program that combines engineering, management, and design, leading to a master’s degree in engineering and management.
A full-time MBA program for mid-career leaders eager to dedicate one year of discovery for a lifetime of impact.
This 20-month MBA program equips experienced executives to enhance their impact on their organizations and the world.
Non-degree programs for senior executives and high-potential managers.
A non-degree, customizable program for mid-career professionals.
Cybersecurity plans should center on resilience
5 predictions for fintech in 2024
Leadership advice: 'Women have to learn how to ask for more money'
Credit: koya79 / iStock
Ideas Made to Matter
Artificial Intelligence
By
Beth Stackpole
At food service company Sysco, generative artificial intelligence is another tool that optimizes sales, processes, and supply chains.
Companies already focused on adopting and effectively using digital tools and technologies are now figuring out how generative artificial intelligence fits in.
At Sysco, a food service company with $76 billion in sales in fiscal year 2023, generative AI is another tool that can help with optimizing sales, operations, supply chain performance, merchandising, and product assortment.
Tom Peck, an executive vice president and chief information and digital officer at Sysco, discussed how the company is using generative AI during a recent webinar with MIT Sloan principal research scientist
“Digital technology, AI, and generative AI are not just pervasive in our business, they are really driving our transformation,” Peck said. “Upwards of 80% of orders are now customer-placed, and data from AI is driving those upsell, cross-sell shopping experiences as opposed to more transactional reorders.”
“Where there’s information, where there are processes connecting with customers and operations, there’s an opportunity to apply some AI,” Westerman said.
The two discussed Sysco’s key use cases for generative AI, best practices for implementation, and how generative AI fits into the company’s broader digital strategy.
While Sysco has been using traditional AI and machine learning for some time, the company is still experimenting with generative AI use cases.
Currently, its efforts are supporting two primary areas:
Sales and support: Sysco maintains nearly 2 million SKUs, about 200,000 of which are in high demand among customers. The firm has been leveraging traditional AI and analytics to make product recommendations, but generative AI can incorporate unstructured data, such as images or social media data, to capture additional signals. “This will help us be even more creative feeding the shopping cart for our customers,” Peck said. “We are starting to see bigger shopping carts and higher margins by turning traditional AI into more generative AI.”
Sysco also aims to enable a smarter, more proactive call center. This includes leveraging generative AI to perform sentiment analysis, which involves analyzing data about customer state of mind to help build more effective scripts for representatives to use during support calls.
On the sales side, the company is also using generative AI for call planning, by having it suggest and automate next-best actions for team members. Generative AI can also aid in menu curation, helping to develop and circulate carefully chosen images that inspire customers to buy additional products, as well as in customer segmentation, to help sales professionals better target offerings. “It’s a great way to make our teams more effective and get the right product to delight the customer,” Peck said.
Supply chain: Any warehouse operation, especially in the food industry, is dependent on data and algorithms to move and track product efficiently. In that vein, Sysco is using AI and generative AI to manage inventory, optimize warehouse logistics, and route customer deliveries more efficiently. One example is intelligent substitutions, which means using AI to suggest alternative products when something is out of stock or delivery is impacted by a weather event. Smart routing uses onboard telematics to better manage the company’s 14,000-truck fleet by using information about weather conditions, traffic, and onboard temperature zones in vehicles for more dynamic routing. Generative AI can also guide optimal product picking in the warehouse, and truck loading.
“What’s new here is the data outside of a traditional structured database that can feed a more predictive and more prescriptive route so we’re getting more pieces picked per pallet or more trucks loaded faster,” Peck said. “Ultimately, it’s about running a smarter warehouse.”
Peck made the following recommendations for companies looking to evolve their use of generative AI.
Integrate generative AI into broader technology strategy. At Sysco, AI and generative AI are components of a broader automation strategy, Peck said. Most business cases can be solved with robotic process automation, bots, or traditional AI. If those technologies can’t solve the problem, it’s time to consider building something using generative AI capabilities, he said. “I don’t need a generative AI strategy,” Peck said. “I need an automation strategy.”
Consider buying versus building. Sysco opts to purchase AI capabilities such as robotic process automation bots and tools before building its own large language models because Peck prefers the capabilities to be part of a native tool set. “We’ll buy and leverage what we already have, and then, if we have to, we will go to one of the technology providers,” he said.
Understand roles and talent. Sysco views generative AI as a productivity enhancer for humans rather than as an employee replacement. Instead of creating a formal AI team, Sysco trains and teaches employees new skills and makes sure people have the right tools at their disposal, Peck said. “Don’t underestimate the talent you already have,” he said. “I would rather take an internal employee who’s engaged and talented and teach them the skills to become an AI architect or developer.”
CIOs can take a leadership role. Most CIOs or chief information and digital officers are business savvy and play a leading role in driving transformation and business process improvement, Peck said. Generative AI is another opportunity for them to step up and play an influential role.
Watch the webinar: Preparing your organization for a generative future
The mission of the MIT Sloan School of Management is to develop principled, innovative leaders who improve the world and to generate ideas that advance management practice.
This article was autogenerated from a news feed from CDO TIMES selected high quality news and research sources. There was no editorial review conducted beyond that by CDO TIMES staff. Need help with any of the topics in our articles? Schedule your free CDO TIMES Tech Navigator call today to stay ahead of the curve and gain insider advantages to propel your business!
