Generative AI could enable manufacturers to gain a competitive edge when it comes to product development, a new paper by IBM has found.
The Sharpening a Competitive Edge with Generative AI report, undertaken by IBM’s Institute for Business Value, found that nearly half (49%) of CPG organisations are considering and evaluating the adoption of generative AI for product development.
In addition, some 25% of firms are piloting gen AI solutions in product development, while one in five (20%) are implementing and operationalising it.
Addressing The Failure Rate
With an estimated 30,000 new products introduced annually in the consumer goods market, and the failure rate as high as 95% for new product launches, the use of AI can improve 'go-to-market success rates, supply chain efficiency, and sustainable practices for consumer products companies', IBM said.
Of the firms that are utilising generative AI in the product development process, 97% are using it to augment knowledge search, 92% to create analytical models, and 91% to create custom product visualisation and designs.
According to IBM, generative AI has the potential to improve the product development cycle by up to 30%, among other efficiencies.
'Consumer product industry leaders are rapidly adopting generative AI, the report states. 'More than two-thirds agree or strongly agree that this technology is important to the future of their organisation. And more than three-quarters of these leaders agree or strongly agree that generative AI should be adopted quickly to keep up with the competition.'
Supply Chain Enhancement
Generative AI also plays a role in improving supply chain capabilities, the report found – areas in which it is being utilised by consumer goods firms include augmenting knowledge search internally and externally (95%), generating demand forecasting from structured/unstructured data (89%), and summarising complex documents (81%).
Just under half of executives state that generative AI is expected to reduce forecasting errors, while 24% believe it will reduce inventory carrying costs.
