DHL, Plantation, Fla., released its latest research report on digitalization in the supply chain, revealing that new technologies and solutions are developing at a fast pace and disrupting industries on multiple fronts, with supply chains struggling to keep up. The global survey of nearly 350 supply chain and operations professionals reveals that 95% of respondents are not fully capitalizing on the potential benefits that physical innovation and information/analytics offer.
The report, “Digitalization and the supply chain: Where are we and what’s next?” conducted by lharrington group LLC, Washington, D.C., and commissioned by DHL, identifies how the industry is coping with the fast-changing and disruptive environment posed by the rise of digitalization in the supply chain. Next-generation robotics, artificial intelligence, AVs, blockchain, big data analytics and sensors are just some of the technologies businesses must now consider integrating into their operations and supply chain strategies.
Respondents ranked big data analytics as the most important information solution, with 73% reporting that their company was investing in this technology, ahead of cloud-based applications at 63%, the Internet of Things (IOT) at 54%, blockchain at 51%, machine learning at 46% and the sharing economy at 34%. Importance in physical hardware has focused on robotics with 63% of respondents ranking it as the most important physical technology, beating AVs at 40%, 3D printing at 33% and augmented reality and drones at 28%.
“There is no doubt that digitalization is having an incredible impact on supply chains and operations across the globe and is here to stay,” says Lisa Harrington, president, lharrington group. “Companies are faced with many options as new products and applications enter the market and gain acceptance in the industry. Having a purposeful strategy for supply chain digitalization is now essential to assess the new technological landscape and chart a way forward to reap the benefits and stay ahead of the competition.”
Businesses are beginning to test the waters with 39% reporting that they are developing one or more information or analytics solution, but only 31% are doing the same for physical applications. The underlying reasons for the slow pace are symptomatic of traditional organizational change scenarios. For hardware technology applications, 68% of respondents said that reliability was the top concern, while 65% reported a resistance to change in their organization followed by insufficient or prolonged return on investment at 64%. Comparatively, for information and analytics solutions, 78% of respondents reported that organizational siloes and legacy systems were the top impediments, followed by a lack of specialized talent expertise at 70%.
“This is a transformative juncture for the supply chain industry,” adds José Nava, chief development officer, DHL Supply Chain. “The traditional model is facing unprecedented levels of disruption from new hardware technologies combined with information and analytics solutions. Technology offers considerable opportunity to reduce cost and improve profitability, but it also means businesses that fail to adapt risk getting left behind. Our customers are increasingly looking to us to lead the way during this transition.”