A report released Monday by MHI and Deloitte finds that 55% of supply chain leaders are increasing their supply chain technology and innovation investments; 88% of respondents said they plan to spend more than $1 million — 42 % plan to spend more than $10 million — on improved collaboration between tech and human workers.

According to a March 12 news release announcing its publication, the 2024 MHI Annual Industry Report, titled “The Collaborative Supply Chain: Tech-forward and Human-Centric,” provides new insights into trends and technologies transforming supply chains and the priorities of the people who run them.

MHI concluded that increased investments will likely result in the adoption of the 11 categories of technology covered in the report, which is predicted to rise dramatically over the next five years.

• Inventory and Network Optimization – 85%
• Internet of Things – 85%
• Artificial Intelligence – 84%
• Sensors and Automatic Identification – 83%
• Robotics and Automation – 82%
• Cloud Computing and Storage – 82%
• 3D Printing – 81%
• Advanced Analytics – 78%
• Blockchain – 77%
• Autonomous Vehicles and Drones – 76%
• Wearable and Mobile Technology – 75%

The 2024 report by MHI and Deloitte covers the latest technologies that can transform supply chains in a human-centric way, aiming to maximize performance gains while empowering workers. The report also noted how supply chain leaders will be pivotal in creating and enhancing this balance between technology-driven and human-centric approaches.

“The focus on technology in supply chains is undeniable. But supply chains are run by people, and human-centricity is the key,” said John Paxton, CEO of MHI. “A human focus on technology implementation encourages the kind of creativity and innovation that builds stronger, more streamlined operations. It also attracts new hires, retains current workers, and empowers team members to higher levels of safety and performance.”

Top Concerns

Price increases top the list of supply chain challenges, talent shortage, customer demands, and disruption are close behind

Price increases due to inflation are the biggest supply chain challenge cited by survey respondents at 53%; the other top concerns tailed close behind, including labor shortages at 52%, customer demands at 51%, insight into customer behavior at 50%, and supply chain disruptions/shortages, also at 50%. 

Another finding noted how companies are leveraging digital tech to make supply chains more agile, adaptable, and resilient, helping them seize new opportunities and anticipate disruptions. 

The survey found that firms are using technology to enable human workers: 45% are using technology as an enabler for human decision-making, 42% to improve sustainability, 42% to increase visibility, and 40% to empower human workers. 

 “Successful firms are dedicating training resources to build the bridge between supply chain technology and human workers,” said Wanda Johnson, a technology fellow at Deloitte Consulting LLP.

AI on the Rise

AI adoption and interest are at historic levels, with 84% of survey respondents now reporting plans to adopt artificial intelligence technologies within the next five years. One key challenge is understanding and planning how to benefit from AI tools and how quickly to implement them.

The report concludes that AI has the potential to improve supply chain resiliency, worker productivity, satisfaction and retention. It can adjust training methods, develop new skills and provide relevant advice to leaders. A human-centric and collaborative approach to AI is vital for long-term supply chain success. It boosts productivity and enables higher levels of performance and innovation. 

“AI has the potential to create more resilient supply chains and transform the role of human workers in the space—creating a variety of new jobs and improving real-time decision-making and efficiency,” said Paxton, MHI’s CEO.

Leading Trends Impacting Supply Chains in 2024 and Beyond

This year’s survey revealed five trends impacting supply chains that will dictate the course of actions for industry leaders moving forward, including:

• Supply Chain Agility is essential as geopolitical concerns and ongoing risks impact operations. Organizations need to ensure their supply chains center on flexibility and adaptability in the face of dynamic market conditions, geopolitical risk, and growing reshoring initiatives.
• Rising Costs including inflation and cost of capital. While inflation is easing in the U.S., firms must monitor and strategically manage rising costs globally, particularly in Europe.
• Supply Chain Workforce, including the talent shortage and changing skill sets. Automation is increasing overall worker satisfaction by making jobs better and more tech-forward. However, culture and flexibility are key in recruiting, retaining, and re-skilling a high-achieving workforce.
• Sustainability and ‘Environmental, Social, and Governance’— referred to as ESG — measurement and reporting regulations are on the near horizon, and organizations are working with their suppliers to meet coming Net Zero goals and respond to risks associated with climate-related disruptions.
• Visibility and Transparency goals are compelling leaders to prioritize technology-driven investments and supplier collaboration

The report includes case studies of digital supply chain technologies and offers recommendations for leaders on developing strategies for implementing these innovations.

Methodology

The survey findings were based on responses from more than 1,700 manufacturing and supply chain industry leaders from various industries at the end of 2023. Eighty-one percent of respondents hold executive-level positions, including CEO, Vice President, General Manager, Department Head, or Engineering Management. Participating companies ranged in size from small to large, with 75% reporting annual sales of more than $50 million and 17% reporting $1 billion or more.

The report is available for download HERE. 

For more information, visit mhi.org.