APRIL 2019
“With supply chain complexity showing no signs of slowing, the risk of inaction is only growing. Leading manufacturing and supply chain executives agree that technology is the key to future success.”
Potential to disrupt and create competitive advantage
The top technologies respondents say can be a source of either disruption or competitive advantage are:
- Robotics and automation (64%)
- Predictive analytics (59%)
- Artificial Intelligence (55%)
- The Internet-of-Things (IoT) (52%)
- Driverless vehicles & drones (51%)
Adoption Rates
Cloud computing and storage has the highest current adoption rate (56%). Adoption is expected to grow to 79% over the next two years, and to 91% over the next five years.
Over the next five years, Predictive Analytics is expected to reach an 87 percent adoption rate, followed by IoT at 80%, Robotics and Automation at 72%, Artificial Intelligence at 55% and Driverless Vehicles and Drones at 51%.
Top Barriers to Adoption
The top three barriers to adoption of these technologies are:
- Tackling the supply chain skills gap and
workforce shortage (65%)
- Customer Demands for lower prices
(56%)
- Customer demands for faster
responses times (54%)
Supply Chain Talent Gap
A highly skilled and increasingly digital supply chain workforce is needed to implement these technologies. This has been a theme in all six annual reports and the talent gap is growing as the adoption of these technologies increases.
The top critical skills needed to compete in the next generation supply chain according to the survey and consistent with previous years; analytics/modeling/visualization (40%), strategic problem solving (37%) and general business acumen and cross-functional knowledge (31%).
To download the report, click here.
Four Stages of Digital Adoption and the Supply Chain Digital Consciousness Index (DCI)
It is clear that data and technology will empower supply chains in the future, but it’s not a single technology-it will be a combination of the 11 highlighted in the survey.
The report defines a pyramid of digital adoption that has four technology stages, starting with the collection of data through digital connectivity, and then moving up the pyramid to generate increasing supply chain value and insights from that base data through automation, advanced analytics, and ultimately artificial intelligence.
The report includes a Supply Chain Digital Consciousness framework, developed by MHI and Deloitte, to help organizations assess their digital mindset and gauge their progress on the journey to becoming more digitally conscious.
The Supply Chain Digital Consciousness framework characterizes a supply chain on four levels of awareness – from dormant to elevated – and across five digital categories
The five digital categories span all dimensions of supply chains, from leadership, talent development and workplace culture, to technology and innovation adoption, to customer experience.
This framework can help companies understand their current level of digital adoption and then identify gaps and next steps to boost digital consciousness and supply chain performance.
Within this framework, the report includes an assessment tool companies can use to measure where they are on their digital adoption journey via a Supply Chain Digital Consciousness Index (DCI).
The Supply Chain DCI measures progress regarding the five digital categories:
Leadership
Innovation/Technology
Customer Engagement
Talent
Workplace Environment
The Supply Chain DCI quantifies the current level of supply chain digital consciousness, as well as measuring progress made toward the desired end-state. It helps firms determine the current state of their digital consciousness, determine and prioritize gaps in order to develop a comprehensive strategy for digital consciousness that meets their unique business goals.
“Leading companies are elevating their ‘supply chain digital consciousness’ to drive the kind of innovation that enables them to gain competitive advantage and thrive in today’s always-on economy,” said Prest.
The report also provides real-world case studies of digital supply chain technologies and recommendations for leaders for developing strategies to implement these innovations.
“As digital capability fuels customer expectations to unprecedented heights, NextGen supply chains must be proactive, predictive and prescriptive, with all of its links interconnected and synchronized to the same drum beat of consumer demand,” said Scott Sopher, principal, and leader of the global supply chain practice at Deloitte Consulting LLP.
“As the pace of supply chain innovation escalates, so does the price of inaction. Leaders will outpace their competitors faster than ever,” added Prest.
The findings in this report are based on survey responses from over 1,000 manufacturing and supply chain industry leaders from a wide range of industries. Sixty percent of respondents hold executive-level positions such as CEO, Vice President, General Manager, or Department Head. Participating companies range in size from small to large, with 59 percent reporting annual sales in excess of $100 million, and 10 percent reporting annual sales of $10 billion or more.
HefCel-coated wood (left) and untreated wood (right) after 30 seconds flame test. (Photo: VTT)