‘Always-on’ supply chain ready to adopt technology

MHI Industry Report sees accelerating use of robotics, sensors, and analytics.


George Prest, CEO of MHI, delivers the annual MHI Industry Report April 6 at the MODEX Show in Atlanta. Courtesy: CFE MediaThe manufacturing supply chain is accelerating—and so is the adoption of new technology to increase the speed to market for products.

That was the primary finding of the 2016 MHI Industry Report at the biannual MODEX Show in Atlanta on April 6. George Prest, CEO of MHI, and Scott Sopher, principal with Deloitte, which conducted the study, unveiled the report's finding. The MHI study finds that robotics and automation, network optimization, sensors, automatic IDs, and predictive analytics are being added at an increasing rate. That trend will continue into through the end of the decade.

Prest said that among survey respondents, 52% indicated they would spend $1 million in technology investments in the next six to 10 years, and 3% were ready to invest $100 million. "There were 83% of companies, up from 75% a year ago, who believe at least one of these technologies could be a competitive advantage in the future," Prest said.

The industry still faces significant challenges, especially in the area of talent recruitment and training. The biggest industry challenge, ahead of even a custom demand for faster response times and lower costs from supply chain customers, was the issue of hiring a skilled workforce. Even with an estimated 1.8 million supply chain jobs available by 2018, the workforce issue remains the one area where the industry remains challenged. Of the survey respondents, 56% said training their staff to utilize the new technology would be their top priority, and 38% said the lack of adequate talent was a significant issue.

What was unmistakable from the survey results is the supply chain industry is mirroring the consumer in terms of the need for speed. "Digitally-engaged consumers are always on," Sopher said, "and that requires an always-on supply chain to meet their needs. It's clear technology is driving the change." Among the study's other findings:

  • 37% said predictive analytics in supply chain had the potential to create a competitive advantage and 7% more found that it would disrupt the industry, as opposed to 24% who said it would have little to no impact.
  • Adoption of robotics in the supply chain industry currently is at 35%, but that number is expected to grow to 74% over the next six to 10 years.
  • There were about 20 million sensors in the supply chain industry in 2013; that number is expected to increase to 1 trillion by 2022 and more than 10 trillion by 2030.
  • Mobile and wearable technologies also are an area of future investment. While just 26% of supply chain professions use mobile technology today, that is expected to triple by 2026 to more than 75%.

In making a case for these industry changes, which will require both capital investment and a commitment to training, the survey's authors suggested, "Leaders need to embrace these new and emerging technologies and determine how to best apply them to meet their specific supply chain needs. Supply chain leaders need a well thought-out talent management strategy, aligned to business goals, to help them compete effectively and efficiently in today's global marketplace."

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Before the calendar turned, 2016 already had the makings of a pivotal year for manufacturing, and for the world.

There were the big events for the year, including the United States as Partner Country at Hannover Messe in April and the 2016 International Manufacturing Technology Show in Chicago in September. There's also the matter of the U.S. presidential elections in November, which promise to shape policy in manufacturing for years to come.

But the year started with global economic turmoil, as a slowdown in Chinese manufacturing triggered a worldwide stock hiccup that sent values plummeting. The continued plunge in world oil prices has resulted in a slowdown in exploration and, by extension, the manufacture of exploration equipment.

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