7 Findings in the 2021 MHI Annual Industry Report Prove Supply Chain Innovation Is No Longer a Choice

Thanks to COVID-19, many organizations’ supply chain vulnerabilities were revealed as unanticipated disruptions popped up amid the global crisis. All those decades of investment in building Lean, just-in-time, cost-reducing manufacturing and distribution supply chains suddenly seemed misspent, as companies scrambled to meet customer demands. Yet, some companies proved able to weather the storm, responding flexibly, recovering quickly, and even thriving amid the pandemic, while others floundered.

What set these leading organizations apart? In a word, innovation.

The most resilient companies, as it turns out, were the ones who had invested in digital technologies prior to the pandemic. That innovative foresight enabled these operations to be more prepared to adapt, survive and respond with greater success than their competition.

Those investments include technologies whose adoption and impact have been continuously monitored over the past eight years with an annual survey of supply chain leaders in The MHI Annual Industry Report. The most current research, conducted by Deloitte Consulting, resulted in the 2021 edition, “Innovation Driven Resilience.” Released at ProMatDX in April and available as a free download, the report again covered:

– 3D Printing
– Artificial Intelligence (AI)
– Blockchain
– Cloud Computing and Storage
– Driverless Vehicles and Drones
– Internet of Things (IoT)
– Inventory and Network Optimization
– Predictive Analytics
– Robotics and Automation
– Sensors and Automatic Identification
– Wearable and Mobile Technology

Among the report’s findings, seven data points underscore companies’ recognition that innovation has become a — if not THE — leading factor in a supply chain’s degree of resilience in the face of uncertainty or disruptions. They include the following:

1. 83% of supply chain leaders believe digital will become the predominant model in the next five years; 22% say it already is.

2. The technologies most utilized by supply chains currently include cloud computing and storage (57%); inventory and network optimization tools (45%); sensors and automatic identification tools (42%); and robotics and automation (38%).

3. 49% of those surveyed report plans to accelerate spending in digital technologies to make their operations more responsive and forward looking. How much?

– 57% plan to spend more than $10 million on robotics and automation
– 48% plan to spend more than $10 million on cloud computing
– 43% plan to spend more than $10 million on predictive and prescriptive analytics
– 26% plan to spend more than $10 million on artificial intelligence

4. The biggest future investments are in technologies that bolster resilience: inventory and network optimization (54%); cloud computing and storge (54%); robotics and automation (53%); and sensors and automatic identification (52%).

5. Companies that invested in technologies that enabled remote work either before (22%) or during (42%) the pandemic had a much easier time maintaining business as usual during shelter-in-place mandates.

6. To prepare for the next decade, 48% of respondents are leveraging technologies that enable closer partnerships with vendors and suppliers for greater supply chain visibility; 42% have begun to pilot new technologies; 39% have increased investments/budgets for technological innovations; and 37% are recruiting for different skillsets to align with future needs.

7.  The top two challenges supply chain leaders say they face are hiring and retaining qualified workers (52%) and forecasting (48%).

– To combat labor challenges, survey respondents are turning to robotics and automation solutions that streamline warehouse movements, such as picking/packing/sorting of orders (42%), loading/unloading/stacking cartons and pallets (34%), and material/product transport within a facility (30%).

– Predictive analytics is being applied to demand forecasting (44%), gaining customer and market insights (43%), supply planning (40%), and inventory optimization (35%).

Indeed, as these technologies’ adoption rates continue to grow, leading organizations now see them as table stakes. That leaves the rest to catch up — which explains the significant and dramatic acceleration to invest in innovations that support strategies for increased resilience noted above.

Not a leader? Don’t worry. For companies still at the outset of their digital supply chain journey, the 2021 MHI Annual Industry Report concludes with a series of recommended actionable steps readers can take to move their organization forward. Discover how you can put these strategies to use today by downloading the report.

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