DHL has published a research report on digitalization in the supply chain. It shows that new technologies and solutions are developing at a rapid pace and are significantly changing the industry’s operations on many levels, which makes it difficult for supply chains to adapt quickly. A global study of nearly 350 supply chain and operations experts shows that 95% of respondents are not fully leveraging the cost-reduction potential resulting from hardware development and the capabilities offered by information and analytical solutions.
“Digitalization and the Supply Chain: Where are we and what is still ahead?” is a report prepared by Lisa Harrington, President of lharrington group LLC, commissioned by DHL to examine how the industry is coping in an environment subject to rapid and violent changes due to the increasing digitalization of the supply chain. Next-generation robotics, artificial intelligence, autonomous vehicles, blockchain, and big data are just some of the technologies that companies must now include in their operational and supply chain strategies.
According to the respondents, big data analysis is the most important information solution – 73% of them said their company has invested in this technology; followed by cloud-based solutions (63%), the Internet of Things (54%), blockchain (51%), machine learning (46%), and the sharing economy (34%). Regarding physical hardware, 63% of respondents declared that robotics is of the greatest importance, ahead of autonomous vehicles (40%), 3D printing (33%), and augmented reality and drones (28%).
– Undoubtedly, digitalization has an extraordinary impact on supply chains and operations around the world, and its importance will not diminish. Companies are facing a wide range of new products and applications entering the market and gaining recognition in the industry. Having a targeted supply chain digitalization strategy is now crucial to assess the new technology environment and set a course of action to reap the benefits and gain a competitive advantage – said Lisa Harrington, President of lharrington group LLC.
Companies are beginning to recognize the opportunities, and 39% of them declare that they are developing one or more information and analytical solutions, while only 31% are developing new hardware applications. The slow pace is a result of traditional organizational change scenarios. In the case of hardware technology application, 68% of respondents declared that the biggest problem is reliability, and 65% cited resistance to organizational change; the next most frequently mentioned problem (64%) was insufficient or long-term return on investment. Comparatively, for information and analytical solutions, 78% of respondents stated that organizational silos and legacy systems were the biggest obstacles, followed by (70%) a lack of specialized talent expertise.
Digitalization is crucial for companies to enable them to meet the growing demand for increased efficiency and flexibility and to improve customer service quality. The study results will help further shape DHL’s digitalization strategy. With a clear vision and a rich portfolio of key technologies that can be applied, DHL has already begun the digitalization process, focusing on investments in innovations that can solve real business problems and leverage new opportunities. For example, DHL is already using augmented reality in warehouses to increase picking efficiency, and warehouse robots improve picking times and support employees in repetitive tasks such as packaging services. Robotic process automation (RPA) is taking over selected back-office processes. New sensors provide our customers with real-time information about the location and condition of their goods using the Internet of Things.
– This is a watershed moment for the supply chain industry. The traditional model is facing an unprecedented level of disruptive change caused by new hardware technologies combined with information and analytical solutions. Technology offers significant opportunities to reduce costs and improve profitability, but it also means that companies that do not adapt risk being left behind. Increasingly, our customers want us to guide them through this process of change – said José F. Nava, Chief Development Officer at DHL Supply Chain. – One example showing how DHL is also exploring future technologies is blockchain; we are working with Accenture on this to test a concept aimed at preventing counterfeit drugs, which Interpol estimates kills one million people a year. As part of this collaboration, blockchain is being introduced into the pharmaceutical supply chain through serial tracking monitoring. This allows us to securely capture the unique identifier of each pharmaceutical shipment as it moves through the supply chain. The technology is novel but promising, and we are excited about the possibilities it may offer our customers in the future.
Research report “Digitalization and the Supply Chain: Where are we and what is still ahead?”
Summary:
1. The study involved 335 respondents from various sectors, including automotive, consumer, life sciences, technology, engineering, manufacturing, and others. The respondents were geographically dispersed around the world.
2. Only 5% of respondents asked about their implementation of both information/analytical and hardware technologies answered that they are at the stage of transforming the broadly understood supply chain, and as many as 95% of them still do not realize the potential benefits.
3. Among respondents asked about the main benefits they expect from the use of physical technologies, 82% cited cost reduction and higher profitability, and 77% said the same regarding digitalization in the form of implementing information and analytical technologies.