General Mills, a leading food industry giant, has successfully implemented AI projects that have resulted in millions of dollars in cost savings. The executives shared this information during an investor conference held on Tuesday. One of the key areas where General Mills utilized AI was in its logistics planning, which led to a reduction in transportation costs and an improvement in customer service levels. The AI models analyzed over 5,000 daily shipments from plants to warehouses, resulting in over $20 million in savings since the 2024 fiscal year. Additionally, General Mills expects real-time performance data in manufacturing to generate more than $50 million in waste reduction this year.
The company’s focus on digital, data, and technology investments has doubled since 2019, according to CEO Jeff Harmening. These efforts are part of General Mills’ Accelerate strategy, which was initiated five years ago to strengthen its digital infrastructure.
Cost-saving initiatives through AI are not unique to General Mills. Businesses across various industries are increasingly investing in AI projects with the expectation of achieving significant cost savings. Toymaker Mattel and financial services company Charles Schwab are examples of companies that have credited AI for driving down costs and improving overall efficiency.
AI technologies are also being leveraged to drive revenue growth. Colgate-Palmolive, for instance, is using AI in revenue growth management practices to avoid unnecessary costs and boost top-line growth. JPMorgan Chase executives estimated that the company’s AI use cases will deliver around $2 billion in value during a recent conference.
Despite the promising benefits of AI, there is still some skepticism surrounding its implementation. Many technology decision-makers are facing adoption barriers and express concerns about generative AI pilots proceeding without addressing past issues. However, the overall trend in AI costs is decreasing, with companies like Accenture reporting a 74% annual cost decline between different AI models.
In conclusion, while AI holds great potential for cost savings and efficiency improvements, it is essential for businesses to address adoption challenges and ensure that AI initiatives are aligned with their long-term strategic goals. General Mills’ success story with AI serves as a testament to the transformative power of technology in today’s business landscape.
