The adoption of new supply chain technologies is set to accelerate in the short term. As per a report by the US trade association Material Handling Industry (MHI) and Deloitte, 87% of organisations plan to increase their investment in innovation over the next two years to address logistics challenges.
“Investment budgets for 2023-2025 have not only returned to pre-pandemic levels, but have actually surpassed them and are now realigned with the aggressive investment trends we were seeing prior to 2020,” finds the 2023 MHI Annual Industry Report.
The results of the report — based on a survey of more than 2,000 supply chain leaders — show that 90% of executives will invest over $1 million annually in innovative technologies. Of that percentage, 38% plan to allocate between $10 million and $100 for such initiatives.
“Investments in automation and other digital solutions like IoT, advanced analytics and AI 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,” says MHI CEO John Paxton.
Artificial intelligence: a source of competitive advantage
What innovations are poised to reshape the supply chain? The MHI report reveals that AI tops the list of technologies expected to impact businesses. Of the executives surveyed, 58% affirm that AI stands as the technology with the greatest potential to transform industry and create a long-term competitive advantage.
According to the study, “AI is a technology with tremendous potential to streamline operations and accelerate the overall pace of a supply ecosystem.” The survey results indicate that over 75% of companies plan to implement new AI use cases within their supply chains.
Digital technologies are a source of competitive advantage with an added value: sustainability. “Data analytics and AI also play an important role in making supply chain operations more sustainable. These solutions can help in waste reduction and more accurate forecasting as well as aid in optimising vehicle routes to reduce fuel consumption,” state the authors.
Other technological innovations that are also becoming major drivers of transformation and competitiveness in businesses include the Industrial Internet of Things (57% of executives believe it will have a decisive impact), autonomous vehicles and drones (55%), sensors and automatic identification (54%) and inventory and network optimisation systems (53%).
Supply chains of the future
The rise of digitalisation is unstoppable. According to 86% of professionals surveyed, by 2027, supply chains will be “digital, autonomous, connected, intelligent and agile.”
MHI contends that the accelerated investment in technology will make digital supply chains a widespread global trend by 2033. In the future, organisations that have invested in technological innovations will achieve greater speed, connectivity and transparency. They will benefit from accurate and actionable data that will be crucial for their success.
11 technology innovations that are reshaping the global supply chain industry
- Artificial intelligence
- Cloud computing & storage
- Driverless vehicles & drones
- Internet of Things
- Inventory & network optimisation
- Predictive analytics
- Robotics & automation
- Sensors & automatic identification
- Wearable & mobile technology
- 3D printing