MHI Industry Report: Supply chain technology, automation set to explode

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.