The top two top strategic priorities of executives are supply chain analytics and multichannel fulfillment, according to a new study released today by MHI and Deloitte Consulting LLP titled “Innovations That Drive Supply Chains – The 2014 MHI Annual Industry Report.”
Preventing innovation in the supply chain are both a talent shortage and a continuing focus on cost reduction.
The talent shortage is being felt by 65% of the respondents who indicated that process, technology and skill set gaps exist within their company. This becomes especially problematic with the 1.4 million new jobs that will be created by 2018, according to MHI’s recently published report, “The U.S. Roadmap for Material Handling & Logistics.”
On the cost side of the challenges, cost reduction is still the No. 1 priority for many supply chain executives. More than 70% of respondents across industries said that controlling costs is a top priority for their companies and their customers.
In fact this focus on cost-cutting in the supply chain is squeezing out innovations in sustainability, even though executives believe these investments are important. Nearly four out of five respondents (79%) felt that sustainability was at least “moderately important.” More than 60% of respondents indicated that significant capability gaps exist in their companies and clients that may prevent them from effectively implementing sustainability programs.
One innovation that will impact the supply chain is Mobility and Machine-to-Machine (M2M) technologies which can improve responsiveness and customer service by providing supply chain workers with the information they need – whenever and wherever they need it. Nearly three-fourths (73%) of respondents said their companies will continue to invest in this area, with nearly half planning to increase their investment over the next three years.
However another innovation, 3-D printing, is not yet on the radar for supply chain executives. Only 17% of respondents view 3-D printing as a strategic priority, with 70% reporting that 3-D printing is not a key consideration.