🔔 Chaos breeds innovation

In "Innovation Driven Resilience," the 2021 MHI Annual Industry Report, MHI and Deloitte surveyed more than 1,000 supply chain professionals worldwide about innovation investments in the supply chain.

They found that 54% of companies are increasing or substantially increasing their investment in inventory and networking optimization, which is tied with cloud computing and storage as the technology companies are investing the most for resilience (followed by robotics and automation at 53%, and sensors and automatic identification at 52%).

The report also found that 45% of companies are currently using inventory and networking optimization tools, up from 40% from last year — and tied with artificial intelligence as the largest technology use jump in the survey.

"Until you put pressure on something, you don't know where the cracks are," said Jim Dempsey, director of U.S. business development and partnerships at Panasonic. Companies found where they didn't have visibility into their supply chains, which prompted this kind of investment too.

"There are still a good number of businesses running on paper and Excel, so in order to get visibility, you have to put some automation out where workers are," Dempsey said, even if it's just giving workers mobile devices to scan barcoded inventory, or adopting RFID tags to generate data, and then using warehouse intelligence to "be able to triage it," he said.

While the technology is becoming ubiquitous, it's not everywhere yet. Retrofitting distribution centers and warehouses — or building new ones — takes time.

"Five years from now, you're going to be an outlier if you don't have this technology implemented," said Riemann. Vision systems, robotics and drones will also become more mainstream as part of this adoption, he added.

"Lots of people in supply chain come from procurement backgrounds where bonuses are paid on securing the lowest unit cost on whatever they're procuring," he said. "We're beginning to see people being paid a little bit differently, and paid more on the overall impact of supply chain and that it can maintain service."

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 We've been banging the drum that "supply" disruptions in the US have a big demand component, given big fiscal stimulus & its boost to demand. You see that in the difference between the US (lhs) & Germany (rhs). German delivery times are normalizing, while they aren't in the US... pic.twitter.com/ttbNWF8Wwh— Robin Brooks (@RobinBrooksIIF) August 26, 2021 

Japan’s Rohm Co. says that vital semiconductors for automobiles and industrial machinery will likely remain in short supply at least throughout next year, adding to ominous warnings about further fallout from the global chip crisis.