The report provides new insights into trends and technologies that are transforming supply chains and the priorities of the people who run them.
A new report released today by MHI and Deloitte finds that 55% of supply chain leaders are increasing their supply chain technology and innovation investments with 88% saying they are planning to spend over $1 million. Forty-two percent plan to spend over $10 million
This investment includes solutions for improved collaboration between tech and human workers, according to the 2024 MHI Annual Industry Report, “The Collaborative Supply Chain: Tech-forward and Human-Centric.” The report provides new insights into trends and technologies that are transforming supply chains and the priorities of the people who run them.
As a result of these increased investments, adoption of the 11 categories of technology covered in the report is predicted to rise dramatically over the next five years.
- Inventory and Network Optimization – 85%
- Internet of Things – 85%
- Artificial Intelligence – 84%
- Sensors and Automatic Identification – 83%
- Robotics and Automation – 82%
- Cloud Computing and Storage – 82%
- 3D Printing – 81%
- Advanced Analytics – 78%
- Blockchain – 77%
- Autonomous Vehicles and Drones – 76%
- Wearable and Mobile Technology – 75%
The 2024 report, the eleventh in a series of annual industry reports published by MHI and Deloitte, provides updates on the innovative technologies that have the most potential to transform supply chains in a human-centric and collaborative way that maximizes performance gains while at the same time empowering workers. Supply chain leaders play a pivotal role in creating and enhancing this balance between technology-driven and human-centric approaches.
“The focus on technology in supply chains is undeniable. But supply chains are run by people, and human-centricity is the key,” said John Paxton, CEO of MHI.
“A human focus on technology implementation encourages the kind of creativity and innovation that builds stronger, more streamlined operations. It also attracts new hires, retains current workers, and empowers team members to higher levels of safety and performance.”
“A human focus on technology implementation encourages the kind of creativity and innovation that builds stronger, more streamlined operations. It also attracts new hires, retains current workers, and empowers team members to higher levels of safety and performance.”
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Price increases top the list of supply chain challenges, talent shortage, customer demands, and disruption are close behind
Price increases due to inflation are the biggest supply chain challenge cited by survey respondents at 53%. However, this was followed closely by the talent shortage (52%), customer demands (51%), insight into customer behavior (50%), and supply chain disruptions/shortages (50%).
These challenges are spurring companies to leverage digital technologies to make their supply chains more responsive and resilient, helping them adapt to changing market conditions, anticipate disruptions, and seize new opportunities.
The survey found that firms are using technology to enable human workers. Forty-five percent are using technology as an enabler for human decision-making, to improve sustainability/ visibility 42%, and to empower human workers (40%).
“Successful firms are dedicating training resources to build the bridge between supply chain technology and the human workers,” said Wanda Johnson, Technology Fellow at Deloitte Consulting LLP.
AI on the Rise
AI adoption and interest are at historic levels, with 84% of survey respondents now reporting plans to adopt artificial intelligence technologies within the next five years. One of the key challenges is to understand and plan how to benefit from AI tools (and how quickly to implement them).
AI has the potential to be a powerful tool for improving supply chain resiliency and enhancing worker productivity, satisfaction, and retention. It can be used to rapidly adjust training methods; empower teams to develop new skills; and increase the capabilities, and performance of individual workers through collaboration with a suite of AI helpers. AI can also help leaders make dramatically better, faster, and more confident decisions by rapidly gathering and analyzing diverse data sets and then generating advice that is highly relevant and actionable.
Adopting an approach to AI that is technology-driven, human-centric, and collaborative is crucial to long-term supply chain success—boosting productivity and empowering workers to achieve higher levels of performance and innovation than ever before.
“AI has the potential to create more resilient supply chains and transform the role of human workers in the space – creating a variety of new jobs and improving real-time decision-making and efficiency,” said Paxton.
Leading Trends Impacting Supply Chains in 2024 and Beyond
This year’s survey reveals five key trends impacting supply chains were identified that will dictate the course of actions and focus for industry leaders moving forward. These key trends impacting supply chains are:
- Supply Chain Agility as geopolitical concerns and ongoing risks are impacting operations. Organizations need to ensure their supply chains center on flexibility and adaptability in the face of dynamic market conditions, geopolitical risk, and growing reshoring initiatives.
- Rising Costs including inflation and cost of capital. While inflation is easing in the U.S. firms will need to monitor and strategically manage rising costs globally, particularly in Europe.
- Supply Chain Workforce including the talent shortage and changing skill sets. Automation is increasing overall worker satisfaction by making jobs better and more tech-forward. However, culture and flexibility are key in recruiting, retaining, and re-skilling a high-achieving workforce.
- Sustainability and Environmental, Social, and Governance (ESG) measurement and reporting regulations are on the near horizon and organizations working with their suppliers to meet coming Net Zero goals and responding to risks associated with climate-related disruptions.
- Visibility and Transparency goals are compelling leaders to prioritize technology-driven investments and supplier collaboration.
The report also provides real-world case studies of digital supply chain technologies and recommendations for leaders to develop strategies to implement these innovations.
The findings of the 2024 report are based on survey responses from over 1,700 manufacturing and supply chain industry leaders from a wide range of industries at the end of 2023. Eighty-one percent of respondents hold executive-level positions such as CEO, Vice President, General Manager, Department Head, or Engineering Management. Participating companies range in size from small to large, with 75% reporting annual sales of more than $50 million, and 17% reporting $1 billion or more.
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