MHI Solutions Improving Supply Chain Performance
Supply chains are becoming more automated and complex as artificial intelligence (AI) accelerates the pace of change, but pressing workforce challenges—including a massive skills gap, chronic labor shortages and high turnover among frontline workers—threaten to limit the benefits of innovation. AI may be exacerbating those challenges, but experts say it will also be the key to solving them.
SUPPLY CHAIN LEADERS may be all in on incorporating AI capabilities into their operations, but they are also sounding alarm bells about the real‑world constraints that could limit their ability to adopt AI and other forms of automation. At the top of their list of concerns: People.
Fifty‑eight percent of industry leaders cited “talent acquisition and workforce challenges” as the top supply chain challenge in the 2026 MHI Annual Industry Report released at MODEX in April—up from 50% in last year’s survey—and called “attracting, upskilling and retaining talent a core part of building resilience and a key requirement for adopting new technology at speed.”
Those challenges include a mismatch between skills workers currently possess and the capabilities companies will need as supply chains undergo what MHI calls a “foundational shift from static execution to AI‑enabled orchestration,” along with chronic labor shortages and sky‑high turnover rates among frontline workers.
Three data points tell the story. In 2025, 370,000 warehouse jobs went unfilled. Distribution centers (DCs) face turnover rates averaging 50% and reaching 100% in some e‑commerce fulfillment operations. Meanwhile, postings for jobs requiring AI implementation skills surged 245%, becoming the No. 1 most in‑demand skill globally.
That statistic, from the 2026 Skills Economy Report by AI‑powered workforce agility platform Cornerstone OnDemand, underscores how rapidly AI adoption is reshaping workforce requirements across manufacturing, distribution and logistics.
The good news is that AI, in addition to already transforming supply chain functions such as inventory management, demand forecasting, transportation planning and procurement, is also becoming a powerful tool for addressing the workforce woes that keep supply chain executives up at night.
Examples include:
- AI‑powered learning and talent development platforms are accelerating, improving and personalizing training, upskilling and reskilling to fit individual learning styles, helping companies develop a future‑ready workforce and enabling workers to chart their own career paths.
- On‑device AI applications on wearables, handheld touch computers and tablets that help frontline workers access actionable information, avoid errors, improve productivity, increase job satisfaction and boost employee engagement.
- AI‑enabled orchestration tools that automate and coordinate decision‑making and tools that forecast daily labor needs are helping companies tame the pervasive “firefighting” culture in warehouses and DCs—and improve worker morale and retention in the process.
- AI tools that provide real‑time productivity insights and greater schedule flexibility, helping workers feel more empowered while reducing absenteeism and improving throughput.
Providers of these solutions and other industry observers say they’re seeing a fundamental shift in how AI is being adopted in supply chain operations. Instead of focusing on end‑to‑end automation, many organizations are adopting a workforce‑first approach that uses AI to support employees and keep them engaged.
“At the end of the day, if you’re an organization and you’re automating things, your competitors are automating things as well, and the way technology works, they’re likely automating the same things,” Mike Bollinger, vice president of strategic initiatives for Cornerstone, said. “So, what does that leave us with as a competitive differentiator as an organization? People.”
THE KEY TO BECOMING FUTURE‑READY
Nowhere is the triple threat of the skills gap, labor shortages and high turnover in the supply chain industry being addressed more comprehensively by AI‑driven solutions than in training and talent development. Cornerstone, with 7,000 customers and 140 million users of its training platforms, is a prime example.
In addition to tracking the progress of employees through training courses, Cornerstone’s global labor market database helps employers “look around the corner” to understand the skills they’ll need to meet future business needs, Bollinger said.
Cornerstone also helps employees take the future into their own hands through a Talent Marketplace that displays all roles and skills their employer is trying to fill and helps employees understand potential career pathways.
“Supply chains are evolving more quickly than the workforce itself,” Bollinger said. “The real constraint isn’t the technology but the ability of companies to identify those gaps between current and needed skills and connecting people to opportunities to reskill and upskill themselves.”
Cornerstone partnered with DHL on a talent development strategy aimed to prepare its workforce of more than half a million employees for future roles within the company. The initiative improved employee satisfaction and retention while helping DHL fill more positions internally and reduce external hiring by 10%, lowering recruiting, onboarding and productivity costs associated with new hires.
In March, Cornerstone added two new AI‑driven features to its Adaptive Learning Agent and AI‑Powered Course Assistant. These tools use assistive and agentic AI capabilities to help organizations improve skill development, time‑to‑productivity and talent development, the company said.
Many supply chain organizations are experimenting with similar approaches. The innovation team at MHI member Kenco, for example, is testing an AI vision tool to create training materials for new hires, according to Ainsley Williams, vice president of automation and innovation.
After an employee is videotaped performing a routine task, the AI tool automatically edits the footage to remove dead time and converts the video into written step‑by‑step instructions, so new associates have both visual and written guidance to contextualize the training they need.
The goal is to determine whether AI‑generated materials are more effective than traditional training methods, which often require experienced workers to step away from their regular responsibilities to train new associates.
“Making these videos (manually) is tedious, and it’s a whole workstream, which I think prevented us from doing it in the past,” Williams said. “If we can create those videos, edit them and deploy them with AI in an automated way, it would help us share learnings across different sites, and we wouldn’t lose productivity on an associate.”
Two major trends are exacerbating the skills gap and the need for new training and upskilling. According to Cornerstone’s research, AI and automation are expected to absorb up to 30% of entry‑level work hours by 2030 across industries, reducing traditional opportunities for workers to build experience. At the same time, aging Baby Boomers continue to leave the workforce, increasing the urgency to transfer the institutional knowledge they’ve accumulated over decades.
WORKFORCE‑FIRST AI
The shift toward workforce‑first AI is something Andre Luecht, Global Strategy Lead for Transport and Logistics at MHI member Zebra Technologies, is witnessing firsthand. Zebra focuses on what it calls “AI for the frontline”—arming workers with real‑time information through on‑device AI applications in wearables, handheld touch computers and tablets.
The technology uses data collected from radio‑frequency identification (RFID), machine vision and scanning systems to support workers and deliver immediate performance feedback. The Zebra Frontline AI suite also features a generative AI‑based knowledge agent that workers can query in multiple languages for information from company training manuals and standard operating procedures.
“What we have seen in our research is there’s a strong correlation between productivity, efficiency, avoiding errors and happiness or job fulfillment on the part of the worker,” Luecht said. “And if you’re not all‑in on full automation, you will have to keep the workforce that is showing up motivated and happy and retain them.”
Just as Cornerstone says its learning platform is cutting the amount of time it takes to make a new hire productive by 50%, Zebra’s on‑device AI promises to reduce the average 30 to 32 days of onboarding it takes to train a new worker to do a basic warehouse task—what Luecht calls “time to competence.”
“That’s real money,” Luecht said. “The faster you become competent, the faster you become motivated, and the faster you become motivated, the faster you become productive.”
As long as humans remain part of supply chain operations, leveraging AI and automation to improve frontline employees’ daily experience will be essential to addressing labor shortages and turnover. In fact, 93% of associates surveyed for Zebra Technologies’ Warehousing Vision Study said that implementing warehouse technologies, robotics and devices would help attract and retain workers.
“The current environment still has a lot of associates on the warehouse floor,” Luecht said. “If you want to keep those people happy, if you want to keep them engaged, if you want to keep them motivated, you provide them with the best possible tools.”
Ken Ramoutar, chief marketing officer for MHI member Lucas Systems, agrees, citing similar results from his company’s survey of warehouse workers, which found that 88% believed investing in technology also meant investing in the workforce. Nearly three in four workers said they would take a pay cut to work for a company with better tools and technology.