Artificial Intelligence, Companies, Features, Supply Chain

Why AI won’t replace management consultants

There's a buzz around AI's potential to automate tasks, analyse vast datasets, and even predict market trends. Image: AdobeStock /Ruslan Gilmanshin

In this article for MHD, Argon and Co. talk about how AI is transforming industries, but in the Australian FMCG sector, human-centric consulting remains essential for solving complex problems and building relationships.

The rise of Artificial Intelligence (AI) is transforming industries worldwide, and management consulting is no exception. There’s a buzz around AI’s potential to automate tasks, analyse vast datasets, and even predict market trends.

For the Fast-Moving Consumer Goods (FMCG) sector in Australia, this raises a crucial question: Will AI replace management consultants?

The short answer is no.

While AI is a powerful tool, it cannot replace the human-centric skills that are core to effective consulting, particularly in the relationship-driven Australian market.

The macro-economic shift and AI’s role

Globally, businesses are allocating significant resources towards resilience-building strategies, with some sectors dedicating 20 per cent of operational costs to these efforts. AI is increasingly being seen as a key enabler of this, with projections suggesting that 75 per cent of supply chain planning will be supported by AI, potentially leading to a 40 per cent reduction in supply chain planning costs.

These macro-level shifts highlight AI’s potential to improve efficiency and reduce risk. In fact, some companies anticipate a 35 per cent increase in operational efficiency and a 25 per cent reduction in forecasting errors thanks to AI-enabled resilience by 2025.

But, the adoption of AI is not uniform, with larger companies leading the way: 68 per cent of large companies have integrated AI, while only 33 per cent of medium-sized and 15 per cent of small firms have adopted the technology. This hesitance underlines the need for strategic guidance and expertise.

Narrow vs. general-purpose AI: Understanding the difference

It’s crucial to differentiate between narrow and general-purpose AI. Narrow AI excels at specific tasks, like improving sales forecasts or automating repetitive processes. Think of it as a specialist, good for tasks like Netflix’s recommendation engine or voice recognition tools like Siri.

On the other hand, general-purpose AI is more adaptable, capable of performing a wide range of tasks without extensive training. Large language models (LLMs) like ChatGPT are examples of general-purpose AI, suited for text generation, image recognition, and your mails.

While narrow AI can offer highly targeted automation, general-purpose AI provides flexibility and speed. However, neither type can replace the nuanced understanding, communication, and problem-solving skills that management consultants bring to the table.

The human touch: Why consultants remain essential

Here’s why AI won’t replace management consultants, especially in the Australian FMCG sector:

Complex Problem Solving: AI is great for optimising specific processes. However, management consultants often deal with complex, multifaceted challenges requiring critical thinking, creativity, and an understanding of human behaviour.

Relationship Building: Consulting is heavily reliant on building trust and strong relationships with clients. This involves effective communication, active listening, empathy, and the ability to navigate different personalities and organisational cultures- skills that AI can’t replicate. In the Australian FMCG sector, where personal connections and understanding the local market are crucial, this is especially important.

Change Management: Successfully implementing changes in organisations requires managing people’s reactions and securing buy-in. Consultants are adept at guiding teams through transitions, addressing resistance, and ensuring smooth adoption of new strategies and systems.

Strategic Insights: While AI can provide data-driven insights, consultants bring a strategic perspective to analysis, helping businesses make informed decisions aligned with their long-term objectives. Consultants synthesise data, qualitative insights, and industry knowledge to craft holistic strategies.

Contextual Understanding: AI models require vast amounts of data and can struggle with nuances specific to certain business sectors or locations. Consultants have the advantage of understanding the unique context of the Australian FMCG market, including local regulations, consumer behaviours, and supply chain dynamics.

AI as a tool, not a replacement

Instead of replacing consultants, AI should be viewed as a powerful tool to enhance their capabilities. Consultants can leverage AI for data analysis, predictive modelling, and process automation, freeing them to focus on strategic thinking, client engagement, and change management.

AI can also help consultants quickly adapt to changing business needs. As one example, general-purpose AI and LLMs can rapidly transform non-standardised data into ERP-ready sales order forms. In one case study, a beverage manufacturer reduced order processing time by 73% through this process.

The AI revolution is underway, but management consulting is not going to be relegated to the history books. The value of human relationships, combined with strategic insight, change management skills, and contextual understanding, will continue to be vital for business success.

While AI will transform many aspects of consulting, it’s the synergy between AI tools and human expertise that will drive businesses forward. The future of consulting in Australia is not about replacing humans with AI, but about empowering consultants with AI to deliver even more value to their clients.

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