While new and improved supply chain innovations are always making headlines, a recent survey conducted by Kenco, Chattanooga, Tenn., reveals that awareness and interest are not the same as adoption.
Kenco surveyed supply chain leaders from a range of industries to get a deeper understanding of how they define innovation, which technologies will have the greatest impact and plans for the future of innovation.
Defining innovation in the supply chain
According to the “State of the 3PL Innovation Survey,” for nearly 85% of these respondents, “innovation” in their organization is defined as “process improvements” or “business model innovation.”
While most chatter in the industry suggests all companies have their eyes on flashy new technologies, this data signals that what is most important to supply chain leaders are new technologies and solutions that can have incremental but impactful changes TODAY in their supply chains.
Digging deeper into the specific types of innovation they want to invest in, supply chain leaders are currently taking a more measured approach in adopting new solutions for their supply chain. When asked which areas leaders are planning to invest in, the Top 3 areas of interest are:
1.Supply chain visibility (83%)
2.Robotics and automation (58%)
However, many of the headline-making innovations – like drones (8%), augmented reality (8%) and driverless vehicles (14%) – ranked lowest on the list.
When leaders were asked about how important each of these technologies is for their business, 64% deemed supply chain visibility as a high priority, while drones (42%) and driverless vehicles (40%) were equally indicated as not a priority (at least, for now).
Not innovation for the future, but innovation for today
Despite the promise that the future holds and their interest in progress with emerging technologies, supply chain leaders are most interested in adopting innovation for TODAY, which includes some proven technology and the emerging solutions that are easier to prove such as Internet of Things (IoT). Supply chain leaders want to adopt new solutions that have been tested, with a proven ROI.
While transformational innovations are lower on the business priority list currently, it’s important for them to be on the radar of supply chain leaders, and especially the radar of 3PL providers, as they generally lead to new revenue streams.
The best of innovation is yet to come
What is new today quickly becomes outdated – and the technologies of tomorrow will be mainstream before too long. The technologies that are not as high of a priority at this moment (such as drones and driverless cars) may soon rise through the ranks and become a priority – and possibly a necessity – to remain competitive in the supply chain industry.
This will occur as emerging technologies begin (and continue) to become more tested and reliable. In fact, 94% of survey respondents feel that it’s important for their 3PL provider to have a competency in technology and innovation, and more than half expect their 3PL provider to be investing in innovative technologies (another 32% want to co-invest). Even more so, supply chain leaders are looking to their 3PL to be thought leaders on innovation and educate them on growing industry trends.
Supply chain leaders will likely struggle to pinpoint the savings when looking to implement future innovation and emerging technologies. Partnering with an innovative 3PL is a beneficial step.