Nearly three quarters (74%) of supply chain leaders are increasing their supply chain technology and innovation investments, according to a new report by MHI and Deloitte. Of those, 90% are planning to spend over $1 million, an increase of 24% over last year, and 36% percent plan to spend over $10 million, up 19%.
These investments include solutions for improved supply chain transparency and sustainability, according to the 2023 MHI Annual Industry Report, “The Responsible Supply Chain: Transparency, Sustainability, and the Case for Business.” 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 following 11 categories of technology is predicted to rise dramatically over the next five years:
- Inventory and Network Optimization: 87%
- Cloud Computing and Storage: 86%
- Sensors and Automatic Identification: 84%
- Advanced Analytics: 82%
- Wearable and Mobile Technology: 80%
- Robotics and Automation: 78%
- 3D Printing: 75%
- Artificial Intelligence: 73%
- Internet of Things – 68%
- Blockchain: 68%
- Driverless Vehicles and Drones: 66%
The 2023 report provides updates on the innovative technologies that have the most potential to transform supply chains into more transparent, sustainable, and responsible operations.
“Responsible supply chains must react in real-time to changing conditions, this requires actionable data, automation and automated decision-making,” said John Paxton, CEO of MHI. “Investments in automation and other digital solutions like IoT, advanced analytics and AI not only arm your operations with speed, accuracy, and improved visibility. These solutions enable the real-time decision-making and transparency necessary for reporting and improving performance up and down the responsible supply chain.”
Workforce Tops Supply Chain Challenges
Once again, hiring and retaining qualified workers (57%) and the talent shortage (56%) were the top supply chain challenges cited by survey respondents. However, this was followed closely by supply chain disruptions (54%), out-of-stock situations (52%) and customer demands (52%).
The worker shortage is spurring companies to invest in technologies that not only improve agility and efficiency but also reduce the need for repetitive, manual labor.
“Tech investment is only part of the equation,” said Paxton. “Having an innovative culture and the right people in place to implement innovation and to bring it all together to exceed your customer demands and expectations – whether they are fast delivery, personalization, low cost, delivery transparency or sustainability goals.”
Focus On Sustainability
Supply chain companies are faced with increasing pressure to become more environmentally responsible and sustainable. In fact, nearly half of this year’s survey respondents (48%) say they face increased influences to adopt a more sustainable supply chain. The pressure is coming from many angles, including consumers, regulators, industry groups, traditional and social media, and other stakeholders that increasingly expect brands and their supply chains to adhere to their own high standards.
According to the survey, the top focus areas for sustainability are electrification (40%), natural resource management (29%), water usage (27%), and transition to renewables (27%). However, only 23% of respondents have made Scope 3 emissions a top focus of their sustainability efforts.
With so much valuable new data being generated by supply chains, the ability to share that data securely and transparently has become a strategic priority. Scope footprinting, target setting, abatement and disclosure for sustainability simply isn’t possible without collaboration up and down the supply chain and the availability of accurate and reportable data. Additionally, achieving true end-to-end supply chain transparency requires the same.
“As leaders, we must drive transparency and coordinate change across the end-to-end supply chain as we work collaboratively to reduce Scope 3 emissions and move toward the circular economy,” said Paxton. “Sustainability will become a key competitive advantage for in the future. Investments in sustainability and transparency help reduce risk exposure and build loyalty with customers and employees alike.”
The report includes a Climate Readiness Assessment to help companies evaluate their operations’ maturity across 5 modules of climate with a brief diagnostic that can provide a snapshot of an organization’s climate maturity. Upon completion, the user is classified into one of 6 climate profiles.
“Supply chain companies embarking on their sustainability journey will need input from across their organization to support reporting,” said Wanda Johnson, Specialist Leader, Deloitte Consulting. “Embracing circularity, reducing environmental impacts, regenerating nature, and embedding equity should all be coded to their DNA and driven from the top down for them to be successful.”
The report also provides real-world case studies of digital supply chain technologies and recommendations for leaders for developing strategies to implement these innovations. The report ends with a report on Supply Chain 2033 with predictions on what will be the future state for supply chains.
Read the full article "Top Priorities For Supply Chains: Workforce, Risk Mitigation" on Facility Executive Magazine.