Supply Chain Disruption Accelerates Digital Transformation

According to a new industry report from MHI and Deloitte, nearly 80 percent of leading supply chain players surveyed said they’re accelerating their digital transformation due to the disruption from the pandemic.

The annual industry report for 2022, entitled Evolution to Revolution: Building the Supply Chains of Tomorrow said 64 percent of supply chain leaders are increasing tech investment in technologies including artificial intelligence and predictive analytic, with 18 percent saying they’ll invest more than $10 million in new tech over the next two years, 41 percent said they’ll spend more than $5 million and two out three will invest more than $1 million in tech during the same period.

The 2022 report, the ninth annual supply chain report from MHI and Deloitte, identified 11 innovative technologies that it said have the greatest potential to transform supply chains.

In addition to AI and predictive analysis, the list of most transformative tech included robotics and automation; inventory and network optimization; wearable and mobile technology; autonomous vehicles and drones; 3D printing; the Internet of Things; cloud computing and storage; sensors and automatic identification and blockchain.

The report projected adoption rates over the next five years for each of these technology categories and offered an analysis of common barriers to adoption.

It predicted that cloud computing and inventory/network optimization would achieve nearly 90 percent adoption during the next five years, while adoption of artificial intelligence will see the most accelerated growth, from 15 percent to 73 percent, during the same period.

According to the annual report, robotics and automation, currently adopted by 28 percent of the industry, will surge to nearly 80 percent in the next five years. By nearly a 2-1 margin, respondents said they believe increased use of robotics and automation will create a competitive advantage rather than disrupt the industry.

The survey identified supply chain disruptions and shortages as the top challenge to the industry, displacing hiring and retaining qualified workers, which has been cited as the top concern in each of the previous annual reports.

“Supply chains are becoming more and more a technology-driven industry. What we are seeing now is a big jump in those investments. Where we used to say evolve or die, what we now say is transform or die,” Thomas Boykin, Supply Chain Specialist Leader, Deloitte, said in prepared remarks.

The MHI/Deloitte report suggested that deploying robotics and automation to do work that required repetitive manual labor not only improves efficiency, but also makes supply chain jobs more attractive because they require workers with high-tech skill sets.