55% say they are increasing their investment in supply chain tech and innovation and 42% are planning to invest over $10 million
Atlanta, GA – 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.”
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:
1. 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.
2. 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.
3. 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.
4. 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.
5. 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.
Download the complete report here.
About MHI
MHI is an international trade association that has represented the material handling, logistics, and supply chain industry since 1945. MHI’s over 970 members include material handling and logistics equipment and systems manufacturers, integrators, consultants, publishers, and third-party logistics providers. MHI offers education, networking, and solution sourcing for their members, their members’ customers, and the industry as a whole through programming and events. The association sponsors the ProMat and MODEX exhibitions to showcase the products and services of its member companies and to educate manufacturing and supply chain professionals. The Warehousing Education and Research Council (WERC) is a division of MHI and provides education and research to the warehousing, distribution, and logistics community
MODEX 2024 is being held at Atlanta’s Georgia World Congress Center from March 11-14.
About Deloitte
Deloitte provides industry-leading audit, consulting, tax, and advisory services to many of the world’s most admired brands, including nearly 90% of the Fortune 500® and more than 5,000 private and middle market companies. Our people work across the industry sectors that drive and shape today’s marketplace — delivering measurable and lasting results that help reinforce public trust in our capital markets, inspire clients to see challenges as opportunities to transform and thrive, and help lead the way toward a stronger economy and a healthy society. Deloitte is proud to be part of the largest global professional services network serving our clients in the markets that are most important to them. Now celebrating 175 years of service, our network of member firms spans more than 150 countries and territories. Learn how Deloitte’s more than 312,000 people worldwide make an impact that matters at www.deloitte.com.