How far along are you on adopting digital technology into your supply chain? Survey results show the C-suite has a very different answer to that question than operational leaders.
Digital continues to be a strategic imperative for most supply chain organizations, according to Gartner’s “Supply Chain Technology User Wants and Needs Survey.” But how far along they are in implementing that strategy seems to be a matter of debate.
For 13 years Gartner has surveyed supply chain business users about their information technology (IT) goals, priorities, maturity, and investment strategies. In the 2019 survey, “digital” was identified as a core strategy and focal point as supply chain organizations looked to advance their supply chain maturity and business performance. (We recognize that the term “digital” has different connotations, depending on the focus of the discussion. In the context of the survey, digitization is defined as applying digital technologies to improve supply chain performance.)
A difference of opinion
The survey represented a variety of viewpoints. A bit over 45% of respondents were senior supply chain leadership with the rest being members of operational management, including vice presidents, directors, and managers.
When we compared the responses of senior-level leadership to those of the front-line, mid-level management respondents, we observed an interesting dichotomy. Throughout the study, senior leadership had an overly optimistic view of their organization’s capabilities and commitments to supply chain IT. This inflated exuberance at the top likely causes companies to overstate their real abilities, which could have negative ramifications for their performance.
For example, respondents were asked to select which statement most closely describes their organization’s current state as it pursues digital supply chain initiatives. They had to choose between: “We struggle to fully understand and define how digital supply chain will affect our business and what investments we will need to make to be successful” and “We have a clear vision, plan, and road map driving our digital initiatives.” Almost unbelievably, 97% of C-suite respondents said they had a clear vision, plan, and road map. Even more surprising is how strong this sentiment was with 66% saying they had moderately to very strong digital competencies; a statement which is not supported by the hundreds of calls Gartner takes each year during which customers seek our guidance on developing digital strategies and road maps. This suggests that respondents are overestimating and overstating their abilities.
In contrast, 81% of respondents who were in operational management felt they had strong digital strategies. So while operational management was still optimistic, there was a 17-percentage point drop from the C-suite. Additionally, those respondents who felt they had moderately high to high levels of competency dropped from 66% for C-suite respondents to 41% for operational management respondents. Again, this highlights a notable disconnect between the beliefs of top supply chain leadership and those of operational management. This misalignment can cause many issues for organizations from frustrations due to differing views of reality, unrealistic expectations, and misallocation of resources.
Emerging tech: A status check
A notable way to advance a company’s supply chain digital maturity is to exploit emerging technologies that offer compelling value propositions. Promising supply chain management technologies can help transform a company’s operations. To explore this, the study asked respondents to rate the importance of and their investment plans for 10 emerging technologies, including artificial intelligence/machine learning (AI/ML), the Internet of Things (IoT), robotic process automation (RPA), and augmented reality/virtual reality (AR/VR).
The data again found a significant disconnect between what senior leadership believes to be true and what operational, front-line management perceives to be true. Figures 1 and 2 explore how respondents rated the importance of key emerging supply chain technologies and where they are currently investing or planning to invest. The reason we asked these two questions in this way is because we wanted to know if companies were “putting their money where their mouth is.” This would be like asking people if they believe it is important to save for retirement, and then asking them how much they are actually saving. If the data finds that companies consider something to be important, but they are not investing in it, then this indicates they might not see it as important as they say.
Figure 1 shows the responses for C-level supply chain executives, and it shows an overly dense clustering across all the emerging technologies. This clustering indicates that in executives’ minds, these technologies are all equally important and that they are investing significantly in all of these without prioritizing one or the other. This belief is unrealistic and unsupported by anecdotal evidence from Gartner client interactions, which find that companies are selectively investing in a smaller number of these technologies that offer the greatest near-term business value.
[Figure 1] C-suite respondents: Importance vs. Adoption of Emerging Technologies Enlarge this image
Figure 2 shows the responses for all respondents excluding C-level executives. It shows a much more realistic distribution of responses, with some more mature emerging technologies like big data, RFID, and IoT showing the most investment and the greatest importance and the remaining technologies scattered more evenly. This a more realistic view is supported by anecdotal evidence from Gartner client interactions.
[Figure 2] All respondents (except C-suite): Importance vs. Adoption of Emerging Technologies Enlarge this image
We find about 20% of companies identify as early adopters of technologies, and these are the most likely to have pilot programs in multiple emerging technology areas. Around 55% of respondents self-identify as mainstream adopters of technologies. These organizations are much more selective in choosing where to invest, and they typically wait for emerging technologies to mature somewhat before they enter the market for packaged solutions that exploit the emerging technology.
For example, an early adopter might purchase an IoT development platform and build its own predictive maintenance system, while a mainstream adopter would look to buy a predictive maintenance system that leverages IoT. This would align with the position of technologies like big data, RFID, and IoT maturing faster than some other technologies like digital twins or blockchain.
Digital will remain critical to supply chain success. But the study highlights the possible disconnect between senior executives’ digital ambitions and beliefs about their organization and their organization’s actual capability to meet those lofty expectations. No one is served if these two perceptions are not reconciled.
Senior supply chain leadership should admit that they might have overly lofty goals and that the organization cannot “go to college and major in everything” (to quote a CEO I used to work for). Instead, they need to educate themselves on what each of the technologies can do for their supply chain, and then work with their organization, at all levels, to realistically map out their current and desired capabilities.
Supply chain planning (SCP) leaders working on transformation efforts are focused on two major high-impact technology trends, including composite AI and supply chain data governance, according to a study from Gartner, Inc.
"SCP leaders are in the process of developing transformation roadmaps that will prioritize delivering on advanced decision intelligence and automated decision making," Eva Dawkins, Director Analyst in Gartner’s Supply Chain practice, said in a release. "Composite AI, which is the combined application of different AI techniques to improve learning efficiency, will drive the optimization and automation of many planning activities at scale, while supply chain data governance is the foundational key for digital transformation.”
Their pursuit of those roadmaps is often complicated by frequent disruptions and the rapid pace of technological innovation. But Gartner says those leaders can accelerate the realized value of technology investments by facilitating a shift from IT-led to business-led digital leadership, with SCP leaders taking ownership of multidisciplinary teams to advance business operations, channels and products.
“A sound data governance strategy supports advanced technologies, such as composite AI, while also facilitating collaboration throughout the supply chain technology ecosystem,” said Dawkins. “Without attention to data governance, SCP leaders will likely struggle to achieve their expected ROI on key technology investments.”
The U.S. manufacturing sector has become an engine of new job creation over the past four years, thanks to a combination of federal incentives and mega-trends like nearshoring and the clean energy boom, according to the industrial real estate firm Savills.
While those manufacturing announcements have softened slightly from their 2022 high point, they remain historically elevated. And the sector’s growth outlook remains strong, regardless of the results of the November U.S. presidential election, the company said in its September “Savills Manufacturing Report.”
From 2021 to 2024, over 995,000 new U.S. manufacturing jobs were announced, with two thirds in advanced sectors like electric vehicles (EVs) and batteries, semiconductors, clean energy, and biomanufacturing. After peaking at 350,000 news jobs in 2022, the growth pace has slowed, with 2024 expected to see just over half that number.
But the ingredients are in place to sustain the hot temperature of American manufacturing expansion in 2025 and beyond, the company said. According to Savills, that’s because the U.S. manufacturing revival is fueled by $910 billion in federal incentives—including the Inflation Reduction Act, CHIPS and Science Act, and Infrastructure Investment and Jobs Act—much of which has not yet been spent. Domestic production is also expected to be boosted by new tariffs, including a planned rise in semiconductor tariffs to 50% in 2025 and an increase in tariffs on Chinese EVs from 25% to 100%.
Certain geographical regions will see greater manufacturing growth than others, since just eight states account for 47% of new manufacturing jobs and over 6.3 billion square feet of industrial space, with 197 million more square feet under development. They are: Arizona, Georgia, Michigan, Ohio, North Carolina, South Carolina, Texas, and Tennessee.
Across the border, Mexico’s manufacturing sector has also seen “revolutionary” growth driven by nearshoring strategies targeting U.S. markets and offering lower-cost labor, with a workforce that is now even cheaper than in China. Over the past four years, that country has launched 27 new plants, each creating over 500 jobs. Unlike the U.S. focus on tech manufacturing, Mexico focuses on traditional sectors such as automative parts, appliances, and consumer goods.
Looking at the future, the U.S. manufacturing sector’s growth outlook remains strong, regardless of the results of November’s presidential election, Savills said. That’s because both candidates favor protectionist trade policies, and since significant change to federal incentives would require a single party to control both the legislative and executive branches. Rather than relying on changes in political leadership, future growth of U.S. manufacturing now hinges on finding affordable, reliable power amid increasing competition between manufacturing sites and data centers, Savills said.
The British logistics robot vendor Dexory this week said it has raised $80 million in venture funding to support an expansion of its artificial intelligence (AI) powered features, grow its global team, and accelerate the deployment of its autonomous robots.
A “significant focus” continues to be on expanding across the U.S. market, where Dexory is live with customers in seven states and last month opened a U.S. headquarters in Nashville. The Series B will also enhance development and production facilities at its UK headquarters, the firm said.
The “series B” funding round was led by DTCP, with participation from Latitude Ventures, Wave-X and Bootstrap Europe, along with existing investors Atomico, Lakestar, Capnamic, and several angels from the logistics industry. With the close of the round, Dexory has now raised $120 million over the past three years.
Dexory says its product, DexoryView, provides real-time visibility across warehouses of any size through its autonomous mobile robots and AI. The rolling bots use sensor and image data and continuous data collection to perform rapid warehouse scans and create digital twins of warehouse spaces, allowing for optimized performance and future scenario simulations.
Originally announced in September, the move will allow Deutsche Bahn to “fully focus on restructuring the rail infrastructure in Germany and providing climate-friendly passenger and freight transport operations in Germany and Europe,” Werner Gatzer, Chairman of the DB Supervisory Board, said in a release.
For its purchase price, DSV gains an organization with around 72,700 employees at over 1,850 locations. The new owner says it plans to investment around one billion euros in coming years to promote additional growth in German operations. Together, DSV and Schenker will have a combined workforce of approximately 147,000 employees in more than 90 countries, earning pro forma revenue of approximately $43.3 billion (based on 2023 numbers), DSV said.
After removing that unit, Deutsche Bahn retains its core business called the “Systemverbund Bahn,” which includes passenger transport activities in Germany, rail freight activities, operational service units, and railroad infrastructure companies. The DB Group, headquartered in Berlin, employs around 340,000 people.
“We have set clear goals to structurally modernize Deutsche Bahn in the areas of infrastructure, operations and profitability and focus on the core business. The proceeds from the sale will significantly reduce DB’s debt and thus make an important contribution to the financial stability of the DB Group. At the same time, DB Schenker will gain a strong strategic owner in DSV,” Deutsche Bahn CEO Richard Lutz said in a release.
Transportation industry veteran Anne Reinke will become president & CEO of trade group the Intermodal Association of North America (IANA) at the end of the year, stepping into the position from her previous post leading third party logistics (3PL) trade group the Transportation Intermediaries Association (TIA), both organizations said today.
Meanwhile, TIA today announced that insider Christopher Burroughs would fill Reinke’s shoes as president & CEO. Burroughs has been with TIA for 13 years, most recently as its vice president of Government Affairs for the past six years, during which time he oversaw all legislative and regulatory efforts before Congress and the federal agencies.
Before her four years leading TIA, Reinke spent two years as Deputy Assistant Secretary with the U.S. Department of Transportation and 16 years with CSX Corporation.