A new report released by MHI and Deloitte finds that 74% of supply chain leaders are increasing their supply chain high technology and innovation investments with 90% saying they are planning to spend over $1 million, an increase of 24% over last year, and 36% say they plan to spend more than $10 million, which is up 19%.
These investments include solutions for improved supply chain transparency and sustainability, according to the 2023 MHI Annual Industry Report.
As a result of these increased investments, MHI says that adoption of the 11 categories of technology covered in the report is predicted to rise dramatically over the next five years.
These include inventory and network optimization (87%); cloud computing and storage (86%); sensors and automatic identification (84%); advanced analytics (82%); wearable and mobile technology (80%); robotics and automation (78%); 3D printing (75%); Artificial Intelligence (73%); Internet of Things (68%); blockchain (68%); and driverless vehicles and drones (66%).
“Responsible supply chains must react in real-time to changing conditions, this requires actionable data, automation and automated decision-making,” says John Paxton, chief executive officer of MHI.
“Investments in automation and other digital solutions like IoT, advanced analytics and AI not only arm your operations with speed, accuracy, and improved visibility. These solutions enable the real-time decision-making and transparency necessary for reporting and improving performance up and down the responsible supply chain,” he stresses.
Once again, hiring and retaining qualified workers (57%) and the talent shortage (56%) were the top supply chain challenges cited by survey respondents. However, this was followed closely by supply chain disruptions (54%), out-of-stock situations (52%) and customer demands (52%).
The worker shortage is spurring companies to invest in technologies that not only improve agility and efficiency but also reduce the need for repetitive, manual labor. These investments create the kind of advanced technology environment that results in more rewarding supply chain jobs that appeal to today’s top talent, according to the MHI report.
“This could provide a new path to upskilling current employees and attracting new talent – creating a more modern, capable workforce that can quickly adapt and adjust to changes in the technology and market landscape.”
MHI also said that 41% of respondents are reskilling/upskilling workers for emerging technologies, 34% are recruiting for skillsets for future needs and 27% are working to create a culture of innovation.
“Tech investment is only part of the equation,” Paxton notes. “Having an innovative culture and the right people in place to implement innovation and to bring it all together to exceed your customer demands and expectations – whether they are fast delivery, personalization, low cost, delivery transparency or sustainability goals.”
To prepare for supply chain disruption and build transparency, collaboration is key, MHI explains.
“Company leaders understand that planning for digital supply chain investments now is the only way to create a strategy to win the future – a future where supply chain disruption will be the norm. As a result, 49% are partnering with vendors to understand application/benefits and 31% are piloting new technologies.”
In the past, companies could succeed by primarily collaborating with a small set of suppliers and distributors. MHI adds. “However, the supply shocks of the past few years vividly illustrated that a broader approach for collaboration and data sharing is needed to achieve true transparency, sustainability, and resiliency.”