Supply Chains Will Change Radically over the Coming Decade

Industry 4.0 is coming to the extended supply chain. Over the coming decade, innovations like predictive analytics, 3D printing, and wearable technologies will change the supply chain even as workforce shortages intensify. Customer demands and competition are the driving forces, according to the 2015 MHI Annual Industry Report, “Supply Chain Innovation — Making the impossible possible.”MHI, an international trade association that represents the material handling, logistics and supply chain industry, produced the report with Deloitte Consulting.

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The gist of the report is that new technology will spread across traditional supply chains, changing them radically over the next five to 10 years. On average, companies surveyed expect to invest heavily in new technologies over the next two years, with the top 17% spending more than $10 million.

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MHI has recommended that companies should embrace the supply chain transformation quickly, investing in new technologies as they face constant pressure to do more with less. “The speed at which supply chain innovation is being adopted -- coupled with rising consumer expectations for anytime, anywhere service -- is stressing traditional supply chains to near-breaking points,” said George Prest, CEO of MHI, in a statement about the report. “Companies that continue to use traditional supply chain models will struggle to remain competitive and deliver orders that are accurate and on time.”

The survey focused on eight technologies driving next-generation supply chains:

According to the study, deciding where and when to invest in technologies is crucial to survival over the next decade. This year’s survey found that 46% of respondents are developing partnerships with vendors, analysts, consultants, and trade groups to help them understand evolving technologies and develop business cases for where to invest.

Align with customer needs

As many companies expand their global footprints, adjust their trade flows, and try to meet their customers' ever-rising expectations for faster response times, they will invest in forward-looking technologies and capabilities that can help them assess and redesign their complex supply chain networks to support a constantly changing marketplace. Working with customers through collaboration is a trend that is enhancing the effectiveness of the supply chain. With cloud computing, predictive analytics, and other advances, there are significant opportunities for companies to collaborate with value chain partners, according to the report.

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The report noted technology investments will also help companies deal with the shortages in the technically capable workforce. Multiple factors are contributing to the talent shortage, including an aging workforce. Plus, the changing skill sets needed for jobs in the supply chain is a big factor. The report noted the “supply chain industry needs a sophisticated and well-trained workforce to operate leading-edge equipment and systems.”

Rob Spiegel has covered automation and control for 15 years, 12 of them for Design News. Other topics he has covered include supply chain technology, alternative energy, and cyber security. For 10 years he was owner and publisher of the food magazine, Chile Pepper.

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