This is the year that supply chain technology and automation will move from evolutionary levels of adoption and investment to revolutionary levels, according to the 2022 “MHI Annual Industry Report.”
Now in its ninth year, the report looks at the emerging technologies, innovations, and trends in the supply chain space. The findings are primarily based on a global survey of 1,074 supply chain professionals conducted in late 2021. The report is conducted by industry association MHI and the consulting firm Deloitte.
Key findings from the report were presented Wednesday at MHI’s Modex 2022 supply chain trade show in Atlanta by Thomas Boykin, supply chain specialist leader at Deloitte.
According to Boykin, for many years the report has shown that adoption of supply chain technology and automation has grown at a very steady rate. Over the next five year, however, the report indicates that adoption rates will explode.
For example, the report shows that currently 40% of survey respondents say their companies have adopted cloud computing and storage; 86%, however, say they will adopt cloud computing in the next five years. Similarly automatic identification technology will grow from a 31% adoption rate to an 84% adoption rate, inventory and network optimization tools will grow from 28% to 87%, and robotics and automation from 28% to 79%. Investment levels are also expected to rise sharply, with 66% of respondents saying they will spend more than an $1 million over the next two years in supply chain technology.
The key driver of this move from evolutionary to revolutionary was, unsurprisingly, the pandemic. According to John Paxton, MHI CEO, the pandemic forever changed how the c-suite sees supply chain. He told the audience at the show that 78% of the survey respondents said that the pandemic accelerated supply chain transformation.
This attention is the silver lining of the barrage of disruptions that supply chain professionals have had to deal with over the last two years. As Torsten Pilz, chief supply chain officer at Honeywell, pointed out during a panel discussion about the research results, prior to the pandemic, the supply chain was woefully underfunded with cost reduction being the sole parameter guiding investment decisions.
The goal now is to seize the opportunity granted by the current crisis. “Now is the time take the learnings gathered over last couple years and invest in the right technology to mitigate future disruption,” Boykin said.
If former Alabama University football career Nick Saban could point to a foundational moment in his career that helped shape his philosophy to coaching it would be this: In 1998, his Michigan State University football team with a 4-5 record was headed to Columbus, Ohio, to play an undefeated Ohio State University team. Speaking at a keynote session for MHI’s Modex tradeshow, Saban admitted he did not think his team had any chance of winning. So, he asked his friend who was a sports psychiatrist what he should say to his team.
“He said you need to teach the team to focus on one play at a time, like [the play] has a history and life of its own, and to be totally process-oriented,” Saban recounted. “Do not be worried about the outcome, be worried about all the things you can do to get the outcome. There’s no external factors. There’s no scoreboard. You focus 100% in front of you and what you need to do for that play.”
Michigan State went on to win, in spite of being down by 10 points at one point.
“In that game, I totally changed philosophies and became a transformational leader instead of a transactional leader,” said Saban. “I was no longer always worried about the outcome. What do you have to do to get to the outcome, that was the whole focus.”
Saban attributes that philosophy change to altering the trajectory of his career, resulting in his going on to win seven national college football championships. Saban said that was the one recommendation he would have for business leaders in the audience would be to get out of a similiar transactional mindset of everything is about the bottom line to focus on what needs to be done to get to the bottom line.
Throughout the keynote session—which was conducted as a Q&A with Agile Business Media Founder and Board Member Mitch Mac Donald—Saban continued to touch upon how discipline, process, and culture could foster success both on the football field and off.
“People ask me all the time, ‘What does it take to win?’” he said. “I think they’re expecting me to say, have a good game plan, adjust and adapt during the game, do a good job at the preparation, and have a good system and staff. All of those things are really, really important, but probably the most important thing is the kind of culture you build in your organization.”
MHI CEO John Paxton put it succinctly when summing up the MHI 2024 Annual Industry Report on Wednesday at the industry association’s Modex trade show in Atlanta: “AI is the word of the year.” While you could quibble that artificial intelligence (AI) is actually two words, the general sentiment behind Paxton’s assessment is correct; every recent discussion about supply chain technology eventually wends its way around to the promise and challenges of implementing AI.
The 1,700 manufacturing and supply chain leaders who took part in the survey that formed the basis for the report certainly agreed: 84% of survey respondents said they plan to adopt artificial intelligence technologies within the next five years.
The biggest potential areas of application for AI in the supply chain according to respondents are: logistics, shipping, and transportation (34%); supplier selection/due diligence (33%); inventory management (27%); customer behavior tracking (24%); contracts (24%); pricing (23%); and demand forecasting (19%).
As an example of a potential application for AI in transportation, Matt Hough, Chief Information Officer of Cintas shared during a panel discussion following the release of the report that his company uses AI for dynamically routing its trucks. This effort has allowed the company—which supplies uniforms and cleaning and safety supplies to other business—to create better customer density on those routes. As a result, they were able to handle a major increase in their business while only adding three trucks.
A huge challenge to implementing AI, however, is making sure the integration of AI and human is done well. The panelists acknowledged that there can be a lot of fear around the use of AI and robots both on the floor and in the back office.
“If your workforce is not bought in and are not going to embrace the technology that you are bringing into your facility and supply chain, it’s going to fail,” said Chaneta Sullivan, director, Facility Development and Safety, Chick-fil-A Supply. “Because they’re going to think you’re trying to replace them."
A good way to approach a technology and automation implementation, said Sullivan, is to begin with using technology to respond to any complaints or gripes that your employees have about their job. Use the automation to specifically respond to something that is challenging about their job and make it better. You need to make sure your people understand how the technology is going to improve their life and work environment, she said.
On a more general level, the report showed that investment in supply chain automation and technology continues to be strong. Last year ‘s report showed significant investment in supply chain technology as companies tried to shore up their supply chains in the wake of the disruptions wrought by the pandemic. Some wondered if that interest would cool in light of higher interest rates and growing costs. The 2024 report, however, showed that 55% of supply chain leaders are increasing their supply chain technology and innovation investments with 88% saying they are planning to spend over $1 million. Forty-two percent plan to spend over $10 million.
Stored energy solutions provider EnerSys is showcasing its newest NexSys charging innovations at MODEX 2024 in Atlanta this week.
Engineered for a wide range of automated guided vehicles (AGVs), the new NexSys Air wireless charger offers a space-saving design to provide integration flexibility while eliminating mechanical charging connections and related maintenance. It also provides advanced safety features that help protect workers and equipment—giving facility operators and AGV original equipment manufacturers (OEMs) an integrated, safe charging solution to optimize efficiency and equipment autonomy.
Designed to withstand the elements, the new NexSys+ Outdoor charger provides the advanced performance and features of the NexSys+ charger, protected by an IP54 rated enclosure for protection against dust, water, and seasonal temperatures. The NexSys+ Outdoor is ideal for use at farms, building material yards, rental facilities, ports, cargo terminals, and other working environments exposed to the weather.
Both chargers are compatible with all EnerSys battery technologies, including traditional flooded lead-acid, Thin Plate Pure Lead (TPPL), and lithium-ion.
Visit EnerSys at booth #B8032.
Zebra Technologies introduced a range of new enterprise mobile computing and intelligent automation solutions at this year’s MODEX 2024, taking place this week in Atlanta.
The expanded portfolio is designed to help businesses “build an agile supply chain through better accuracy, visibility, and efficiency.”
The launch includes:
The RS2100 wearable scanner—the industry’s smallest back-of-hand (BOH) scanner, according to Zebra—enhances productivity and delivers new levels of comfort to workers. The unique mount on the RS2100 leaves the palm completely unobstructed, providing greater freedom to handle items.
The WT6400 and WT5400 wearable computers. Engineered to streamline hands-free workflows while enhancing comfort, the WT6400 and WT5400 provide more flexibility for picking orders, sorting items, and managing inventory with greater efficiency and accuracy. With a larger display and integrated keyboard, the WT6400 is easily accessible for right- and left-handed workers, and its integrated angled camera captures images to document damaged items or completed tasks. The WT6400 is designed for demanding environments, including freezer operation (-30°C), while the WT5400 introduces a new class of wearable computers for hands-free retail workflows.
The TC53e/TC58e/TC53e-RFID mobile computers, additions to Zebra’s TC5X series. The TC5Xe series offers 5G, Wi-Fi 6E, integrated RFID, premium security features and contains 25% post-consumer recycled plastic by mass. The TC53e-RFID offers integrated short-range UHF RFID, enabling associates to take inventory in the backroom, validate tickets at a concert or verify all items in a shopping cart from up to nearly 4 ft. away with the same device ergonomics as the standard TC53e.
Rite-Hite, maker of loading dock solutions, industrial products, and software, is launching its Rite-Hite ONE Digital platform during MODEX 2024 in Atlanta this week. Rite-Hite ONE is a comprehensive digital platform that empowers customers to optimize facility throughput, prioritize maintenance, mitigate safety incidents, reduce demurrage, and act on meaningful data analytics from Rite-Hite’s line of smart, connected equipment.
The software platform helps unify material handling operations in warehouses, distribution centers, and other industrial facilities. In addition to connecting Rite-Hite’s smart-enabled high-speed doors and loading dock equipment (such as levelers, barriers, vehicle restraints and controls), it also collects and analyzes data from that equipment, helping facility managers and teams to see trends and make data-based decisions.