Keynote panel confirms digital supply chain shift seen in new MHI study

Wednesday’s keynote panelists agreed it is time to embrace the shift to digital supply chains seen in MHI’s latest annual industry report, titled “Next-Generation Supply Chains: Digital, On-Demand and Always-On.”

In introducing the keynote panel and the results of the fourth-annual MHI study, George Prest, CEO of MHI, commented that in the few years since study first identified key technologies such as drones and autonomous robots as enablers of next-generation supply chains, the technologies have sped from “nebulous” trends to “now here they are” products.

According to the report, nine technologies including sensors, Cloud solutions, robotics, 3D printing, the Internet of Things (IoT) and autonomous vehicles and drones are working together to create supply chains that are digital, on-demand and always-on. Eighty percent of survey respondents believe digital supply chains will be the predominant model within 5 years, while 16% say they already are.

Scott Sopher, a principal with Deloitte Consulting, which MHI partners with to do the annual study, told the audience that “more and more, people see these technologies playing a critical role in their supply chains.” The high level change, he added, is that supply chains are transforming from a linear and sequential model to a “connected, harmonized network of trading partners.”

The panel of industry practitioners and experts included:  Venkat Venkataramani, director, CoE for Digital Supply Chain, SAP; Randy V. Bradley, assistant professor of IS and Supply Chain Management, University of Tennessee; Alan Amling , VP of corporate strategy, UPS; Stacey Hodoh, Global VP, distribution operations at Walmart Canada; Mario Adamy, VP of distribution operations, Albertsons; Jay Kim, chief strategy officer, Upskill; and Amy T. Augustine, senior manager, Reverse Logistics, U.S. Cellular.

The panelists offered examples of supply chain changes already underway. UPS’s Amling said that to reduce congestion, carbon emissions and hit service levels, UPS has piloted e-bikes that have trailer compartments with 77 cubic feet of cargo space. The e-bikes have been tested in Hamburg, Germany, and are part of what Amling sees as “smart city” logistics advances which will also include relatively smaller warehouses in cities. Smart city warehouses will “definitely” need to use robotics and automation to maximize pricy urban space, said Amling.

In an IoT example, SAP’s Venkataramani explained that an SAP customer that produces coffee makers has put IoT-connected sensors in some of its products. The initial idea was to monitor reliability, but the company found connected sensors could gather data on which coffee pod flavors were being used most by geographical region, which helps the company with its inventory planning.

Amling pointed out that with e-commerce growing at a double-digit pace, and more population shifting to metro areas, companies involved in logistics will need to pursue smart city logistics practices to gain efficiencies, deal with congestion, and hit service levels. “The way we are doing [urban logistics] today is just not sustainable,” said Amling.

In addition to eight key technologies the annual study first identified, this year’s study added a ninth one, the IoT. The study has sections on the supply chain talent gap, smart city logistics, and details on how respondents see the nine key technologies being either a source of disruption, or a source of competitive advantage. For instance, 61% now see robotics and automation as either a source of disruption or advantage, up from 39% in 2015.

The report reflects the views of 1,100 manufacturing and supply chain industry leaders on this important topic. The MHI survey can be downloaded from MHI’s website.