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Heroics in the Supply Chain

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During the keynote on Wednesday morning at MODEX 2022, Thomas Boykin of Deloitte joined John Paxton, CEO of MHI, to present the findings of the 2022 report that details the innovations that are revolutionizing supply chain investments amid ongoing disruption. They were joined by a panel of manufacturing and supply chain professionals to discuss the real-world significance of the report findings. Panelists included: 

—Terry Esper, Associate Professor of Logistics, Fisher College of Business, The Ohio State University
—Adrian Kumar, VP & Global Head of Operations Science and Analytics, DHL Supply Chain
—Jason Minghini, Group Vice President Operations, Kenco
—Torsten Pilz, Senior Vice President and Chief Supply Chain Officer, Honeywell 

“Lack of a clear business case was the #1 biggest barrier to adoption for every technology,” shared Boykin in his introductory outline of this year’s findings. While cost concerns were a factor and the impact on day-to-day operations were also key, lack of a clear business case―which provides discipline, control, establishes a case for change and minimizes risk―topped the list.

That was not the only surprising bit of information revealed in the report. 64% are increasing supply chain investment, disruption and shortages lead the list at 57% for top supply chain challenges, and 47% are planning to partner with vendors to understand applications. But one of the most “intriguing” was the number you didn’t see, according to Esper. For example, while 87% say that the pandemic has altered the strategic importance of supply chain operations, what of the 13% that do not? “As a researcher, that intrigues me… They either already got it or they don’t get it.”

Not surprisingly, labor was not only a hot topic at for the panelists, it also scored high for survey-takers. Hiring and retaining qualified workers came in a close second, at 54%, as a top supply chain challenge. Minghini said, “everybody is competing for the same technical labor” and the competition is so fierce that some companies are conducting interviews in the morning and extending offers by the afternoon. Kumar said that on the engineering side, DHL is offering internships right away and making the supply chain industry appealing. They are also trying to structure a program where there is a great career advancement track. Pilz said the biggest problem is the availability of labor. “That is really a big, big problem and nobody talks about it… Trained and skilled labor is almost impossible to find.”

But, there is some light in the tunnel when it comes to labor.  Esper said they’ve seen a significant increase in the number of students who are walking in the door and saying they want to be involved in logistics. Over the last couple of years, “the work we’ve done [in supply chain] is almost heroic,” said Esper. That kind of heroic narrative increased the number of students interested in the supply chain, he added. The Ohio State University also looking into developing internships for freshmen.

The panelists also shared their expert insight on digital twins, which Esper sees as “difficult work” but can see the potential benefit. ESG was addressed briefly, as well, but “for the next decade this is going to be the topic that is going to occupy us, for sure,” said Pilz. Data too center stage too, and its role moving forward. “The community data is really where the richness is,” said Esper, and gives some understanding of predictability.

The panelists also shared some key takeaways, such as: “Everything that you do inside of your operations has to be as efficient as possible… You cannot have a lot of slack,” said Kumar. Esper shared that there is “a link here between these technology conversations and the talent issue”  and the technology conversation is not in isolation of the talent conversation. Pilz suggested that it was time to “change your perspective a bit, instead of trying to solve the morning problem in the morning and the afternoon problem in the afternoon.” Minghini summed it all up by saying, “The spotlight can be good or bad, so let’s make sure it is good!”

To see more statistics and analyses from the MHI 2022 Annual Industry Report: Evolution to Revolution, download it at mhi.org/publications/report. Also, see the press release here.

 

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