Press release

New MHI and Deloitte Report Finds Investment in Supply Chain Technologies will Increase Dramatically in 2019 as Hiring Qualified Workers Continues to be Biggest Challenge

Sponsored by Businesswire

MHI announces the release of the sixth in a series of MHI Annual
Industry Reports developed in collaboration with Deloitte Consulting
LLP. The 2019 MHI Annual Industry Report, titled “Elevating Supply Chain
Digital Consciousness” provides new insights into trends and
technologies that are having a dramatic business impact on supply chains
and the people who run them.

Eight out of ten survey respondents believe digital supply chains will
be the predominant model within just five years. The survey results also
suggest that investment in supply chain innovation is at a critical
inflection point, with a trend of declining investment from 2015 to 2018
being more than countered by a 95% increase in projected spending for

  • 57% of respondents are planning new technology investments totaling
    more than $1 million over the next two years (up 10% over last year’s
  • 34% plan to spend more than $5 million
  • 22% plan to spend more than $10 million.

Manufacturing and supply chain professionals are facing many challenges
but, according to the report, the top one continues to be hiring
qualified workers (65 percent).

This year’s report provides updates on the innovative technologies MHI
predicted would have the most potential to transform supply chains. The
report also covers the potential of these technologies to disrupt the
industry as well as their adoption rates and common barriers to
adoption. The eleven technologies covered in the report are:

  • Blockchain
  • Robotics and automation
  • Predictive analytics
  • Internet of Things
  • Artificial Intelligence
  • Driverless vehicles and drones
  • Wearable and mobile technology
  • Inventory and network optimization
  • Sensors and automatic identification
  • Cloud computing and storage
  • 3D printing

These eleven technologies work together to create next-generation supply
chains that can meet these challenges because they are digital,
on-demand and always-on.

“The pace of supply chain innovation over the six years of our survey is
truly astounding, creating real and measurable competitive advantage for
early adopters,” said George Prest, CEO of MHI. “With supply chain
complexity showing no signs of slowing, the risk of inaction is only
growing. Leading manufacturing and supply chain executives agree that
technology is the key to future success.”

Potential to disrupt and create competitive advantage

The top technologies respondents say can be a source of either
disruption or competitive advantage are:

  • Robotics and automation (64 percent)
  • Predictive analytics (59 percent)
  • Artificial Intelligence (55 percent)
  • The Internet-of-Things (IoT) (52 percent)
  • Driverless vehicles & drones (51 percent)

Adoption Rates

Cloud computing and storage has the highest current adoption rate (56%).
Adoption is expected to grow to 79% over the next two years, and to 91%
over the next five years.

Over the next five years Predictive Analytics is expected to reach an 87
percent adoption rate, followed by IoT at 80 percent, Robotics and
Automation at 72 percent, Artificial Intelligence at 55 percent and
Driverless Vehicles and Drones at 51 percent.

Top Barriers to Adoption

The top three barriers to adoption of these technologies are:

1. Tackling the supply chain skills gap and workforce shortage (65%)

2. Customer Demands for lower prices (56%)

3. Customer demands for faster responses times (54%)

Supply Chain Talent Gap

A highly-skilled and increasingly digital supply chain workforce is
needed to implement these technologies. This has been a theme in all six
annual reports and the talent gap is growing as the adoption of these
technologies increases.

The top critical skills needed to compete in the next-generation supply
chain according to the survey and consistent with previous years;
analytics/modeling/visualization (40%), strategic problem solving (37%)
and general business acumen and cross-functional knowledge (31%).

Four Stages of Digital Adoption and the Supply Chain Digital
Consciousness Index (DCI)

It is clear that data and technology will empower supply chains in the
future, but it’s not a single technology-it will be a combination of the
11 highlighted in the survey.

The report defines a pyramid of digital adoption that has four
technology stages, starting with the collection of data through digital
connectivity, and then moving up the pyramid to generate increasing
supply chain value and insights from that base data through automation,
advanced analytics, and ultimately artificial intelligence.

The report includes a Supply Chain Digital Consciousness framework,
developed by MHI and Deloitte, to help organizations assess their
digital mindset and gauge their progress on the journey to becoming more
digitally conscious.

The Supply Chain Digital Consciousness framework characterizes a supply
chain on four levels of awareness – from dormant to elevated – and
across five digital categories

The five digital categories span all dimensions of supply chains, from
leadership, talent development and workplace culture, to technology and
innovation adoption, to customer experience.

This framework can help companies understand their current level of
digital adoption and then identify gaps and next steps to boost digital
consciousness and supply chain performance.

Within this framework, the report includes an assessment tool companies
can use to measure where they are on their digital adoption journey via
a Supply Chain Digital Consciousness Index or Supply Chain DCI.

The DCI measures progress along the five digital categories:

  • Leadership
  • Innovation/Technology
  • Customer Engagement
  • Talent
  • Workplace Environment

The Supply Chain DCI quantifies the current level of supply chain
digital consciousness, as well as measures progress made toward desired
end-state. It helps firms determine the current state of their digital
consciousness, determine and prioritize gaps in order to develop a
comprehensive strategy for digital consciousness that meets their unique
business goals.

“Leading companies are elevating their ‘supply chain digital
consciousness’ to drive the kind of innovation that enables them to gain
competitive advantage and thrive in today’s always-on economy,” said

The report also provides real-world case studies of digital supply chain
technologies and recommendations for leaders for developing strategies
to implement these innovations.

“As digital capability fuels customer expectations to unprecedented
heights, NextGen supply chains must be proactive, predictive and
prescriptive, with all of its links interconnected and synchronized to
the same drum beat of consumer demand,” said Scott Sopher, principal and
leader of the global supply chain practice at Deloitte Consulting LLP.

“As the pace of supply chain innovation escalates, so does the price of
inaction. Leaders will outpace their competitors faster than ever.”
added Prest.

The findings in this report are based on survey responses from over
1,000 manufacturing and supply chain industry leaders from a wide range
of industries. Sixty percent of respondents hold executive-level
positions such as CEO, Vice President, General Manager, or Department
Head. Participating companies range in size from small to large, with 59
percent reporting annual sales in excess of $100 million, and 10 percent
reporting annual sales of $10 billion or more.

Download the complete report here.

About MHI

is an international trade association that has represented the material
handling, logistics and supply chain industry since 1945. MHI members
include material handling and logistics equipment and systems
manufacturers, integrators, consultants, publishers and third-party
logistics providers. MHI offers education, networking and solution
sourcing for their members, their customers and the industry as a whole
through programming and events. The association sponsors the ProMat
and MODEX expos to showcase the products and services of its member
companies and to educate manufacturing and supply chain professionals on
the productivity solutions provided through material handling and
logistics. ProMat
is being held April 8-11 in Chicago’s McCormick Place.

About Deloitte

Deloitte provides industry-leading audit, consulting, tax and advisory
services to many of the world’s most admired brands, including more than
85 percent of the Fortune 500 and more than 6,000 private and middle
market companies. Our people work across more than 20 industry sectors
to make an impact that matters — delivering measurable and lasting
results that help reinforce public trust in our capital markets, inspire
clients to see challenges as opportunities to transform and thrive, and
help lead the way toward a stronger economy and a healthy society.
Deloitte is proud to be part of the largest global professional services
network serving our clients in the markets that are most important to

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