Industry Report: Numbers for Projected Spending Are Surprising

Every year, the MHI Annual Industry Report reveals some interesting and even surprising results. This year’s report – the sixth in the series – lived up that expectation. The 2019 survey results and the digital and printed versions of the report were released Wednesday morning during a session moderated by Scott Sopher, Principal with Deloitte Consulting LLP’s Supply Chain practice, and George W. Prest, CEO of MHI. “The most surprising data point we had in the survey: planned investment,” said Sopher. The survey, titled MHI 2019 Annual Industry Report—Elevating Supply Chain Digital Consciousness, revealed that after a trend of declining investment from 2015 to 2018, the 2019 numbers show a 95% increase in projected spending.

That was just one of the WOW moments presented in the survey results. Eight out 10 believe the digital supply chain will become the predominant model in the next five years.  Hiring qualified workers is still the biggest challenge for 65%. And artificial intelligence has 62% growth anticipated in the next five years, coming off 13% last year and 6% two years ago.

We are now in the time of necessity, said panelist Randy V. Bradley, Assistant Professor of Information Systems and Supply Chain Management, Haslam College of Business, The University of Tennessee.  “You can no longer sit on the sideline and let others pass you by.” Reality is finally starting to set in. If a pilot project failed  or was determined to be insufficient, companies are coming back and looking at ways to be more strategic-- with the understanding that “many of these solutions are disruptive solutions… or negative in the short term,” said Bradley. They have to be willing to stay the course before they can realize value.

“Technology allows us to shape the demand…instead of being reactive,” said Bradley. “It allows people to be proactive instead of reactive,” Sopher concurred. 

This proactiveness is apparent in a variety of industries, and Bradley mentioned some examples in the cement, beverage and agriculture fields—such as the strawberry harvester. AGROBOT is using AI to determine when strawberries are ripe for harvesting and where to cut the strawberries for best harvesting. 

When it comes to the workforce, “I don’t think it is about finding the talent, it is about attracting the talent,” said Bradley.  One way to do that is to write a compelling job description, said panelist Annette Danek-Akey, SVP Supply Chain, Penguin Random House. And once you have them in-house, you have to get creative. “Sometimes we are not creative with our employee engagement,” said Danek-Akey, who has been actively addressing that at Penguin House with flexible work schedules, a work-availability app called Forge and other innovative ideas, some of which were shared in the latest issue of MHI Solutions (available at the MHI booth and online) in the article, “Workplace Culture That Works.”  “They don’t just want an opportunity; they want to make an impact,” added Bradley about appealing to the next generation. And, no matter what the age or generation, “If you are willing to go the extra mile, you’ll get a qualified workforce,” said Danek-Akey.

The first step to going the extra mile, whether related to the workforce or technology, isn’t going to happen on its own, though. “You need to dive in,” said Prest. “Take a bite of the elephant. Stick your toe in the water.” Most likely, it is not going to be successful the first time you do it. “There is going to be some gain and there is going to be some pain,” he said. Panelist Jim Liefer, CEO, Kindred AI, said all of the levels in a company need to know “the importance of moving now.” And panelist Joel Reed, CEO, IAM Robotics said, “Companies have to be careful, as they can be left behind because of the landscape changing so rapidly.” He recommended starting with the leadership, adapting a culture of experimentation and learning from your failures.  As Bradley put it, it is a matter of trying to solve challenges that businesses haven’t even thought to articulate yet.  

Annette Danek-Akey referenced “Workplace Culture That Works" in MHI Solutions.

Randy V. Bradley wrote an article, "Bridging the (Generational) Talent Gap," in the current issue of MHI Solutions, and contributed to two others: "The Supply Chain Shift Toward Technology--How It’s Impacting Companies’ Workforce Talent Strategies"; "Educating Students for Supply Chain Success." 

Industry Report: MHI 2019 Annual Industry Report—Elevating Supply Chain Digital Consciousness