In its 2018 Annual Industry Report, MHI advises companies to “think big, but start small” when implementing new technology tools and systems.
Realizing that its members are getting bombarded from all sides by what promises to be the “latest and greatest” technology and solution to all of their problems, MHI offers this sage piece of advice in its 2018 MHI Annual Industry Report: Think big, but start small.
In its report, MHI outlines the barriers to building the NextGen Supply Chain, which it says will incorporate robotics, the Internet of Things (IoT), predictive analytics, artificial intelligence (AI), and driverless vehicles—all of which are already disrupting supply chain operations.
“Digital technologies and innovations are driving massive changes and improvements in supply chain. Meanwhile, digital disruption and continued globalization are sending customer service expectations through the roof and stretching supply chains to the farthest reaches of the planet,” MHI states, “putting supply chains under more stress than ever before.”
Here are five things to know about NextGen supply chain technology:
- Digital innovations are projected to have a huge impact on supply chains. According to MHI, eight out of 10 companies believe that the digital supply chain will become the predominant model within the next five years.
- These supply chain changes will be pretty disruptive. MHI says survey respondents believe many supply chain innovations have the potential to disrupt the status quo and create a lasting competitive advantage for companies that embrace them—a belief that most of the innovations has been steadily increasing for at least three years, the organization points out.
- There are already some clear frontrunners in the NextGen supply chain race. MHI says that the top technologies expected to be a source of either disruption or competitive advantage are:
- Robotics and Automation (65% of respondents see this as a source of disruption or competitive advantage, up from 61% in 2017)
- Predictive Analytics (62%, up from 57% in 2017)
- Internet-of-Things (IoT) (59%, up from 55% in 2017)
- Artificial Intelligence (53%, new category in 2018)
- Driverless Vehicles and Drones (52%, up from 30% in 2015)
- The cloud has become the deployment model of choice for supply chain technology. Cloud computing and storage has the highest current adoption rate (57% of companies are using it), according to MHI, and adoption of this technology is expected to grow to 78% over the next two years (and to 91% usage over the next five years).
- Manufacturing and supply chain operations continue to invest heavily in innovation. According to the MHI survey, 47% of respondents are planning new technology investments totaling more than $1 million over the next two years, while 20% plan to spend more than $5 million, and 10% plan to spend more than $10 million.
“Supply chains are rapidly being digitized and disrupted, and information and insights are becoming the currency of NextGen supply chains,” MHI concludes. “In the months and years ahead, organizations should keep a close eye on adoption rates and emerging trends, watching for signs that supply chains are turning the corner on innovation and approaching the exponential growth phase.”
Download the report here.