Technology Adoption Rates Rise as Companies Adapt to Digital “Always-On” Supply Chains, Finds Third MHI Industry Annual Report

Supply Chain talent gap and workforce shortage will continue to grow

ATLANTA–(BUSINESS WIRE)–#MODEXShow–A host of potentially disruptive technologies are creating digital
“Always-On” Supply Chains that will provide better efficiency,
visibility and customer service across a variety of industries, while
challenging companies to find the talent to manage them, according to a
new study by MHI and Deloitte that is now in its third year.

The 2016 MHI Annual Industry Report titled Accelerating Change: How
Innovation is Driving Digital “Always-On” Supply Chains
provides new
insights into trends and technologies that are having a dramatic impact
on supply chains and the people who run them.

The report explores:

  • Eight Key Emerging Technologies, including updates on their
    adoption rates, their ability to create competitive advantage and case
    study examples on how companies are using them;
  • Barriers to Implementing These Supply Chain Innovations; and
  • Levels of Investment in These Technologies.

The report also provides recommendations for supply chain leaders to
help them manage through this period of exponential change.

“The ‘Always-On’ Supply Chain has the potential to deliver massive
economic and environmental rewards for our industry and society,” said
George Prest, CEO of MHI, an international trade association that
represents the material handling, logistics and supply chain industry.
“It can boost productivity and sustainability, drive new markets,
encourage innovation and create new, high-paying jobs. As with all
change, the devil is in the details. That is why MHI provides this
annual report as a resource and guide for our industry as it manages
this unprecedented level of change.”

This year’s report will be launched during an April 6 keynote at MHI’s
MODEX 2016 show, April 4-7, at the Georgia World Congress Center in
Atlanta. The study is based, in part, on responses from 900 supply chain
industry leaders.

Key Findings Include:

  • Lack of Skilled Talent Remains the Industry’s Biggest Challenge – For
    the third year, supply chain leaders identified “hiring and
    retaining a skilled supply chain workforce”
    as the biggest
    challenge facing supply chain professionals, with 58 percent of
    respondents citing this as an industry challenge. “Customer demand
    for faster response times”
    (cited by 56 percent) and “customer
    demand for lower delivery costs”
    (cited by 56 percent) also
    continued to rank as key challenges for the industry.
  • Eight Technologies Enable “Always-On” Supply Chains – A full 83
    percent of survey respondents (up from 75 percent last year) believe
    at least one of the eight technologies in the report could be a source
    of competitive advantage or disruption for supply chains in the next
    10 years.
  • Barriers to Innovation Remain the Same – Again this year,
    industry leaders identified “lack of a clear business case,” as
    the major barrier to investments in new technologies, with 43 percent
    citing it (up from 36 percent last year). This was followed closely by “lack
    of adequate talent to use technologies effectively”
    (cited by 38
    percent) and “cultural aversion to risk” (cited by 35 percent
    of respondents).
  • Companies Are Investing Heavily in New Technologies – Despite
    these barriers, more manufacturing and supply chain companies are
    increasing investments in these technologies. New technology
    investments over $1 million have increased from last year’s survey; 52
    percent of this year’s respondents said they planned investments in
    excess of that amount (versus 49 percent in the 2015 study). Three
    percent of respondents said their companies would spend at least $100
    million on new technologies over the next two years.

Eight Technologies Are Creating the “Always-On” Supply Chain

The industry leaders surveyed viewed the eight technologies studied as
an even greater source of competitive advantage and disruption than they
were just one year ago. The technologies are:

  • Predictive analytics
  • Robotics and automation
  • Sensors and automatic identification
  • Wearables and mobile technology
  • Driverless vehicles and drones
  • Inventory and network optimization tools
  • Cloud computing and storage
  • 3D printing

“The innovations driving ‘Always-On’ Supply Chains are initially
disruptive, but they can empower firms to optimize processes and improve
efficiency, creating a more flexible experience for workers and driving
measurable business outcomes,” said Scott Sopher, principal at Deloitte
Consulting LLP. “According to the survey findings, adoption of the
technologies covered in this report will grow dramatically over the next
6-10 years.”

Four Top Technologies Provide a Competitive Advantage

Industry leaders surveyed identified four top technologies that provide
a competitive advantage for “Always-On” Supply Chains:

  • Robotics and Automation (51 percent of respondents cited, up
    from 39 percent last year)
  • Inventory and Network Optimization Tools (cited by 48 percent
    of respondents, up from 45 percent last year)
  • Sensors and Automatic Identification (cited by 47 percent of
    respondents, up from 42 percent last year)
  • Predictive Analytics (cited by 44 percent of respondents, up
    from 38 percent last year)

Fastest Growing Technologies

The survey uncovered shifts in the growth of some technologies. Namely, “Robotics
and Automation”
and “Driverless Vehicles and Drones” are
making bigger impacts on the supply chain sooner than previously
predicted, with both technologies seeing a 12 percent growth spike over
last year’s report.

  • This year, 51 percent of survey respondents said that Robotics and
    has the potential to either create competitive
    advantage or be a disruptive force in their industry, and 77 percent
    said it will have some impact. Adoption is currently 35 percent. It is
    expected to rise to 74 percent over the next 6-10 years.
  • While “Driverless Vehicles and Drones” are still emerging
    technologies, 59 percent of survey respondents said they are having
    some impact on supply chains, and 37 percent said they have the
    potential to provide competitive advantage or disruption. Adoption
    rates are expected to grow to 50 percent over the next 6-10 years.

Predicted Adoption Rates Are Dramatic

“Cloud Computing and Storage” and “Sensors and Automatic
are leading technologies in terms of current
adoption rate—with 45 percent and 44 percent, respectively. But looking
at the next 6-10 years, six of the eight technologies covered in this
report have predicted adoption rates of 74 percent or higher. Only “Driverless
Vehicles and Drones”
and “3D Printing” have lower predicted
adoption rates over the 6-10 year time horizon, but they are still 50
percent and 48 percent, respectively. This accelerated pace of change
will dramatically alter the way supply chains work and how they are
managed in the future.

Impacts Go Beyond Retail and Consumer Goods Companies

The report concludes that while retail and consumer companies get the
most publicity in discussions about disruptive technologies, they will
impact all industries including manufacturers and business-to-business
enterprises. The report identifies potential benefits of these
technologies across a wide range of industries.



Enabling Technologies


Potential Benefits



Predictive Analytics

  Smarter irrigation and deliberate application of chemicals

Cold Chain

  Sensors and Automatic Identification   Manage and monitor quality remotely

Pharmaceuticals/ Life Sciences

  Sensors and Automatic Identification   Product traceability and batch control

R&D Lab Management

  Predictive Analytics   Clinical trial patient enrollment forecasting and management
Health Care   Predictive Analytics   Enhanced ER diagnostics to drive variable
wait times
Cloud Computing and Storage Customer portals to access doctors, test
        results and schedule


  Cloud Computing and Storage   Better management for media distribution channels and revenue

Oil & Gas

  Robotics and Automation

Sensors and Automatic Identification

  Remote sensing, underground visualization, and automated safety
controls for drilling and fracking

Mining & Construction

  3D Printing

Cloud Computing and Storage

  On-demand replacement parts built with 3D printers at remote sites
to increase asset efficiency

Direct to Consumer

  Inventory and Network Optimization Tools   Anticipatory shipping based on predicted demand

Alternate shipping modes and ship-to locations with drones and

Recommendations for Today’s Supply Chain Leaders

The study makes several recommendations for companies looking to remain
competitive in the manufacturing and supply chain space, including:

  • Invest, test and learn in these technologies
  • Partner with solution suppliers, universities and trade groups
  • Determine where to start generating data
  • Determine how current your data needs to be
  • Make sense of the data so you can act on it
  • Nothing is more important than talent management

“Of all the recommendations we offer leaders in the supply chain
industry, the most important is the need to proactively manage talent,”
Prest said. “The growth in digital, ‘Always-On’ Supply Chains will only
widen the talent gap that already exists in our industry. We need to
train a new breed of supply chain professional who has technical,
analytical and problem-solving skills. Much of MHI’s work is focused on
providing resources to help the industry close the talent gap through
education and training programs and industry collaborations.”

Access the full report here

About the Study

This third annual study was conducted by MHI and Deloitte and is based
on interviews with 900 supply chain executives nationally, from a wide
range of industries. The study explores the current state of the supply
chain and identifies key trends and technologies that will have a
profound impact on the future of the supply chain over the next 10 years.

About MHI

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.
MODEX 2016 will be held April 4-7 in the Georgia World Congress Center
in Atlanta.

About Deloitte

Deloitte’s leading Supply Chain and Manufacturing Operations practice
helps clients address their most complex business problems and achieve
tangible, measurable and sustainable results. According to Kennedy,
Deloitte is a Vanguard Leader, based on capabilities, in Supply Chain
Risk Management Consulting.

As used in this document, “Deloitte” means Deloitte Consulting LLP, a
subsidiary of Deloitte LLP. Please see
for a detailed description of the legal structure of Deloitte LLP and
its subsidiaries. Certain services may not be available to attest
clients under the rules and regulations of public accounting.


Sherri Oosterhouse, 704-236-3517
Miller, 704-714-8734
Jessica Heine,