Digitization accelerating thanks to pandemic, report finds

by Inside Logistics Online Staff

Nearly 80 percent of supply chain leaders say their digital transformation has accelerated due to the pandemic, according to a new report released by MHI in collaboration with Deloitte.

As a result, investment in supply innovation over the next two years is expected to rise dramatically, according to the 2022 MHI Annual Industry Report, “Evolution to Revolution: Building the Supply Chains of Tomorrow.” The report provides new insights into trends and technologies that are transforming supply chains and the priorities of the people who run them.

The 2022 report, the ninth 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, including projected adoption rates of the next five years for each of the 11 categories of technology covered in the report and an analysis of common barriers to adoption.

Disruption tops challenges

For the past nine years of the survey, hiring and retaining qualified workers was consistently the top supply chain challenge.

However, in this year’s survey supply chain disruptions and shortages rose to the top at 57 percent – presumably due to the ongoing effects of the global pandemic. Talent issues (54 percent) and customer demands (51 percent) remain top challenges but must now be addressed in the context of avoiding future supply chain disruptions.

This shortage is spurring companies to invest in technologies that not only improve agility and efficiency but also reduce the need for repetitive, manual labour. These investments create the kind of advanced technology environment that results in more rewarding supply chain jobs that appeal to today’s top talent.

This could provide a new path to retraining current employees and attracting new talent – creating a more modern, capable workforce that can quickly adapt and adjust to changes in the technology and market landscape.

Lack of business case

Company leaders understand at a theoretical level that their supply chains could greatly benefit from investing in innovation, but potential gains often take a back seat to short-term profit targets and concerns over the cost associated with new technology and the threat of disruption to day-to-day operations. For the first time since the inception of the MHI Annual Industry Report, ‘lack of a clear business case to justify the investment’ was cited as the leading barrier to adoption for all 11 technologies in the report.

“Supply chain leaders have never been in a better position to drive impactful and lasting change for the industry,” said John Paxton, CEO of MHI.

“With the white-hot media spotlight chronicling the after-effects of the pandemic, the importance of supply chain is finally coming into focus in boardrooms across the world.”