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ProMatDX 2021: supply chain leaders boost tech spending to build pandemic resilience

Top spending increases go to cloud computing, robotics, and inventory/network optimization tools, MHI and Deloitte study shows.

ProMatDX 2021: supply chain leaders boost tech spending to build pandemic resilience

In a bid to make their operations more responsive and forward-looking during the pandemic, nearly half of supply chain leaders are dramatically accelerating their spending on digital technologies, according to an industry report released today by MHI in collaboration with the Deloitte consulting firm.

In terms of investment, the biggest jump in dollars spent is going to cloud computing, robotics, and inventory/network optimization tools, with 49% of survey respondents increasing their spending, according to MHI’s 8th annual industry report, titled “Innovation Driven Resilience: How Technology and Innovation Help Supply Chains Thrive in Unprecedented Times.”


But the movement to build digitalized supply chains reaches much further than just those three areas, with MHI and Deloitte identifying 11 emerging technologies with a high potential to impact supply chain operations. They include: cloud computing and storage; inventory and network optimization; sensors and automatic identification; predictive analytics; robotics and automation; internet of things; wearable and mobile tech; artificial intelligence; autonomous vehicles and drones; 3D printing; and blockchain.

According to the survey, each of those 11 technologies will be in use by at least 52% of respondents within 5 years, although the only one currently used by more than half the respondents (57%) is cloud computing and storage.

That quick adoption of new technologies shows the industry’s reaction to Covid-19 disruptions and to six main business challenges that survey respondents said they faced:

  • hiring and retaining qualified workers (52%),
  • forecasting (48%),
  • customer demands for lower costs (47%),
  • customer demands on response times (47%),
  • rising customer service expectations (43%), and
  • supply chain disruptions (39%).

In response those pressures, traditional supply chain patterns may be shifting, according to a survey question that identified “new strategies organizations are currently or plan to implement to protect their supply chain from global disruptions.” The top answers included: flexible manufacturing or supply chain related services; building longer-term business relationships with few suppliers; diversify geographic supply base; regionalize the supply chain; holding safety stock if diversification is not readily available; revisit the tradeoff between product variety and capacity flexibility.

In a session delivered at the ProMatDX trade show today, MHI CEO John Paxton said that companies were moving so decisively both because those technologies are increasingly seen as table stakes, and because the pandemic revealed weaknesses in some organizations.

And in a panel discussion about the survey results, speaker Randy Bradley, an associate professor of Information Systems and Supply Chain Management at the University of Tennessee, went further, asking what good it was for a business to to recover from the pandemic if they don’t come out of it better prepare to handle future disruption?

“When we have a natural disaster, the traditional mindset is usually ‘Let’s rally the troops and weather the storm.’ But the challenge is, we’re not better prepared for the next storm than we were for this storm,” Bradley said.

“If your focus is just on surviving it, you look no different, your capabilities aren’t any better. You might have a better understanding of what you can handle, but you didn’t necessarily shore up where there were gaps in your business continuity plan or your disaster recovery plan,” said Bradley.

However, companies that view the pandemic as a staging area or a prep area for innovation have an opportunity to come out of this challenging time looking much better than when they went in, he said.

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