While the adoption of digital technologies continues to be on the rise, firms are struggling to hire skilled workers to run them and extract actionable insights out of the mountains of data being generated by digital supply chains, a new survey shows.
According to the research by MHI, an international trade association that represents the material handling, logistics and supply chain industry, eight out of ten respondents believe digital supply chains will be the predominant model within just five years. One-fifth (20%) believe they are now.
The findings are based on survey responses from over 1,000 manufacturing and supply chain industry leaders from a wide range of industries.
The results, compiled in a report on ‘Embracing the Digital Mindset: Connecting Data, Talent and Technology in Digital Supply Chains’ also suggest investments in supply chain innovation continue to be strong.
Carried out in collaboration with Deloitte Consulting, the findings also suggest half of respondents are planning new technology investments over $1m over the next two years; 25% plan to spend more than $5m; and 5% plan to spend more than $50m.
The technologies that are seen as most likely to transform supply chains are led by robotics and automation, with 67% of respondents believing this has the potential to disrupt or create a competitive advantage.
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By GlobalDataNext are sensors and automatic identification (59%), analytics and artificial intelligence (57% and 56%), while inventory and network optimisation and Internet of Things both come in at 54%.
Adoption rates
Cloud computing and storage has the highest current adoption rate at 59%. Adoption is expected to grow to 81% over the next two years, and to 90% over the next 3-5 years.
Robotics and automation, currently at 39%, is expected to reach 68% in the next 1-2 years and 72% in the next 3-5 years. Predictive analytics, currently at 28%, is expected to grow to 82% in the next 3-5 years. Artificial intelligence, currently at 12%, is expected to grow to 60% in the next 3-5 years.
Talent shortage
When it comes to supply chain challenges, respondents continue to report that their organisation’s greatest challenge is hiring and retaining qualified workers at 57%.
Close behind is the category of customer requirements in which customers continually expect and demand faster response times and lower costs. Digital innovation is essential to solving this customer experience challenge, but the technologies cannot be implemented without a skilled workforce to run them.
“The challenges of digitising your supply chain and bridging the talent gap go hand in hand — one can’t be done without the other,” says George Prest, CEO of MHI.
Connecting data, talent and technologies
What the findings of the report make clear is that data and technology will empower supply chains in the future, but it’s not a single technology – it will be a combination.
Additionally, as every link of the supply chain is becoming more sensor-enabled, and the scope and scale of the resulting data is only increasing, corralling and integrating these data streams can drive quantum changes and improvements in supply chains.
The report calls this data, and the information and insights it provides, the currency of the NextGen supply chain. It also notes that many businesses don’t quite know how to tap into this currency. So to compete in the future marketplace, companies must develop greater expertise at valuing, and capitalising on, their data assets.
“Data is the life’s blood of the emerging digital supply network. Companies that recognise the value of this data and engineer approaches to collect, filter and synthesise it into customer and market insights will flourish. Those who do not will drown in the wave of exponential data proliferation,” says Thomas Boykin, supply chain specialist leader at Deloitte Consulting.
The other essential component of future supply chain success is the people it takes to run them – and the skill sets necessary to connect them to digital supply chain technology.
As digital technologies are constantly evolving, so are the skillsets required to support them. For this reason, many companies are targeting more general skillsets better suited for dynamic work environments.
This point is further supported by this year’s survey responses that highlight the three most critical skillsets over the next five years: project management/leadership (41%); strategic/problem-solving skills and critical thinking (40%); and supply chain management (32%).
“Analytical skills and critical thinking are now table stakes for companies – what is truly in demand is the combination of these skills with the needed breadth and depth of supply chain knowledge,” says Randy Bradley, assistant professor of information systems and supply chain management, Haslam College of Business, The University of Tennessee.
The report also notes that 30% of respondents say they are reskilling their current workforce to meet these new demands.
Building a diverse workforce
The report also emphasises the need for a more diverse and multi-generational workforce for future supply chains. As technology and digital innovation are increasingly becoming the centerpiece for attracting and retaining top supply chain talent, firms are now competing with e-commerce leaders and tech startups for talent.
While competing to attract this talent, firms need to also look at reskilling current employees and older workers re-entering the workforce. The report notes that the pool of workers aged 65-74 is expected to grow by more than 5.1m from 2014-2024, more than any other age group.
Additionally, it predicts a big jump in women in the supply chain workforce in the coming years as the industry trends more toward inclusion and diversity. This year’s survey found that while only 20% of the supply chain workforce over 55 is female, that number jumps to 56% for workers age 18-34.
The survey also found this younger, more diverse workforce values different things from their employer than older workers. The survey found that workers under 34 value corporate responsibility, sustainability, compensation and diversity much more than workers over 55.
