MHI Report Response: Technology in the Supply Chain

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Recently, the MHI Annual Industry Report “Elevating Supply Chain Digital Consciousness” was released and discussed at the 2019 ProMat Show. This is the sixth annual highly rated report on industry research from MHI and Deloitte.

Spending on Technology is up Drastically

The MHI report survey results suggest that investment in supply chain innovation is rising drastically, with a 95% increase in projected spending for 2019, contrary to previously declining budgets from 2015-2018.

The report touches on several major factors pushing for digital implementation in the supply chain.

Digitization and the “Always On” Supply Chain

Shorter service cycles have led to the implementation of digital solutions in order to increase efficiency, transparency and sustainability through each step of the supply chain. This has led to the demand for organization, real time alerts, and accessibility of information at any time of the day. Adding digital components to the supply chain and logistics procedures allows the process to flow 24/7. With the right technology and properly trained staff, an opportunity for expansion, competitive edge and profit emerge.

“Free” Shipping

Companies today must have a broad and complex infrastructure to support quick arrival and returns processing for online retail, as well as keep competitive by covering shipping costs for the consumer. Without real-time metrics, logistics is a complicated process to manage and uphold standards to the same degree as competitors.

Social and Environmental Awareness

Corporate responsibility has increased with rising consumer desire to know where products are sourced from and end up. Supporting this concern requires visibility in the supply chain as ethical sourcing decisions are made internally and then voiced externally.

Skilled Worker Shortage

The labor crunch is identified in the report as a main driver for digitalization as hiring qualified workers remains a large challenge industry-wide. The tight labor market pushes the need to stay above the curve technologically to attract and keep employees as companies are competing for the same talent. The amount of technically skilled workers available to fill supply chain roles is decreasing dramatically. The need to attract, retain and reward a workforce is essential.

Why is the supply chain labor force decreasing? According to the MHI Report, innovative technology like AI/robotics is often perceived as a threat to jobs in the supply chain space. Less young people have invested in completing technical training or pursuing opportunities that appear to have a risk of becoming obsolete. However, this misconception does not address the need for complex and valuable decision makers and those who are skilled in activities that aren’t repetitive enough for technology to take over.

How can you attract and keep good workers?

Educating about the opportunities that are available, sharing perks of the workplace and culture, and creating a good on-boarding training program are the first step.

Once you have hired a quality employee, the focus is on keeping them. This can be done through motivation, engagement and encouragement of growth.

Encouraging employees to train cross-functionally and connect with other departments regularly can create a more well-rounded employee base. It can also help determine where employees are most productive, which is key for labor planning. “Reverse mentoring” can also be a great tool for connecting more seasoned employees with new ones to benefit both parties. Another successful way to motivate employees is through an incentive program.

TZA’s ProTrack Labor Management tool can help you at every step of this process with onboarding and learning curve programs, guides to engage your workforce through incentive programs based on accurate real time performance data reporting, and overall visibility into the workforce to make labor decisions in the moment. ProTrack can give your managers the ability to manage engagement activities with each employee in your operations right when they join the team, and for the duration of their employment. Overall, training employees and keeping them engaged within the organization can decrease turnover and increase workforce retention, leading to smaller labor costs over time.

Deciding Which Technologies to Implement

Determining the optimal technologies to adopt and when to implement them is a huge challenge for decision makers due to the insanely quick pace of innovation and simultaneous market pressures. However, overcoming barriers to adoption of new software or technology is fundamental and needs to be addressed in order to assess benefits. Common barriers are workforce and business case/ROI comparisons, cultural considerations, timelines, non-compatible systems that need updating, and more. A main key to success is establishing a technical architecture that can grow and change with the supply chain and evolving technology. Only a digital supply chain that is agile, fully automated and self-learning will likely be able to meet these demands to compete and thrive in the future.

The trend towards digital in the supply chain strives for a unified, systemic approach to metrics and management of each step in the process. When the right program is implemented at the right time and training occurs, productivity, visibility and engagement strive, revealing return of investment for the business. In this digital age, companies who choose to stay behind the curve are hurt, while organized and technologically driven companies grow.

Is your business placing an emphasis on new technology?

In today’s supply chain, an emphasis on new technology to better the process is essential to staying ahead of the curve, keeping operations sharp and organized, and keeping productivity high to be able to compete well in the marketplace. If you can achieve faster turnaround within the chain due to implemented software, you are ahead of those who spend time doing a longer process of data collection and reporting.

Labor Management in the Supply Chain

When looking at broadening technology in the supply chain industry, Labor Management is key to keeping the workforce engaged, increasing productivity, and overcoming the tight labor market. With effective labor management strategies in place, your company can become a strong competitor in their industry.

Take ProTrack Labor Management Software for example. ProTrack’s visible metrics, real time alerts, and data dashboards save managers time that would normally be used to calculate productivity into a spreadsheet or other document. Supervisors can identify when to coach and give praise through the real time alerts function. They can also set up incentive programs that rewards high performing employees, and keeps them engaged and motivated to strive for optimal productivity and stay on the team for a long time. Increased engagement reduces turnover, increases employee retention, and ultimately can lead to high efficiency.

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