Chicago, IL — A new survey suggests that investment in supply chain innovation is at a critical inflection point, with a trend of declining investment from 2015 to 2018 being more than countered by a 95% increase in projected spending for 2019.
MHI released of the sixth in a series of Annual Industry Reports developed in collaboration with Deloitte Consulting LLP. The 2019 MHI Annual Industry Report, titled “Elevating Supply Chain Digital Consciousness” provides new insights into trends and technologies that are having a dramatic business impact on supply chains and the people who run them.
Eight out of ten survey respondents believe digital supply chains will be the predominant model within just five years.
57% of respondents are planning new technology investments totaling more than $1 million over the next two years (up 10% over last year’s survey)
34% plan to spend more than $5 million
22% plan to spend more than $10 million.
Manufacturing and supply chain professionals are facing many challenges but, according to the report, the top one continues to be hiring qualified workers (65 percent).
This year’s report provides updates on the innovative technologies MHI predicted would have the most potential to transform supply chains. The report also covers the potential of 11 technologies, including blockchain, robotics and automation, predictive analytics, to disrupt the industry as well as their adoption rates and common barriers to adoption. The eleven technologies covered in the report are:
These eleven technologies work together to create next-generation supply chains that can meet these challenges because they are digital, on-demand and always-on.
“The pace of supply chain innovation over the six years of our survey is truly astounding, creating real and measurable competitive advantage for early adopters,” said George Prest, CEO of MHI. “With supply chain complexity showing no signs of slowing, the risk of inaction is only growing. Leading manufacturing and supply chain executives agree that technology is the key to future success.”
The top technologies respondents say can be a source of either disruption or competitive advantage are:
Robotics and automation (64 percent)
Predictive analytics (59 percent)
Artificial Intelligence (55 percent)
The Internet-of-Things (IoT) (52 percent)
Driverless vehicles & drones (51 percent)
It is clear that data and technology will empower supply chains in the future, but it’s not a single technology-it will be a combination of the 11 highlighted in the survey.
The report defines a pyramid of digital adoption that has four technology stages, starting with the collection of data through digital connectivity, and then moving up the pyramid to generate increasing supply chain value and insights from that base data through automation, advanced analytics, and ultimately artificial intelligence.
The report also provides real-world case studies of digital supply chain technologies and recommendations for leaders for developing strategies to implement these innovations.
“As digital capability fuels customer expectations to unprecedented heights, NextGen supply chains must be proactive, predictive and prescriptive, with all of its links interconnected and synchronized to the same drum beat of consumer demand,” said Scott Sopher, principal and leader of the global supply chain practice at Deloitte Consulting LLP.
“As the pace of supply chain innovation escalates, so does the price of inaction. Leaders will outpace their competitors faster than ever.” added Prest.
The findings in this report are based on survey responses from over 1,000 manufacturing and supply chain industry leaders from a wide range of industries. Sixty percent of respondents hold executive-level positions such as CEO, Vice President, General Manager, or Department Head. Participating companies range in size from small to large, with 59 percent reporting annual sales in excess of $100 million, and 10 percent reporting annual sales of $10 billion or more.