Three takeaways from the 2021 MHI annual report
Each year, the MHI annual report details the most profound technology and innovation shifts in the supply chain industry. It also provides the story behind the story – the underlying challenges that fuel the industry’s evolution.
But at nearly 40 pages, there’s a lot to unpack. That’s why we broke it down for you. Here are three key themes from this year’s report.
Meeting labor needs
The top challenge identified by the more than 1,000 manufacturing and supply chain professionals surveyed? Hiring and retaining qualified workers. Over 50% of respondents categorized it as extremely or very challenging, a reality affirmed by other industry data. Last year, labor turnover reached five-year highs in both warehousing (nearly 60%) and manufacturing (44%).
Disruption and operational resilience
It’s been said countless times but bears repeating – 2020 was a year of disruption. That truth emerged clearly from respondents – 39% identified supply chain disruptions as extremely or very challenging and 48% considered forecasting to be extremely or very challenging.
From months-long staffing limits and sporadic facility shutdowns to supply shortages colliding with demand spikes, recent circumstances have made it more challenging to maintain appropriate inventory and production levels. In fact, in addition to coping with the near-term impact of raw material and component shortages, some manufacturers are now weighing measures to build greater resiliency in preparation for potential future disruptions. For more on that, read one of our recent blogs on how material handling can help automotive manufacturers build resiliency.
Responding with technology
So, in the face of disruption and labor challenges, how are companies spending their money?
Technology investments tell us a lot about what businesses believe is required to compete, and their specific choice of technology speaks to what capabilities they expect to be most valuable.
According to the report, more than 50% of supply chain leaders were increasing or substantially increasing their investment in four of 11 technology sectors - inventory and network optimization tools, cloud computing and storage, robotics and automation, and sensors and automatic identification. Which category is gaining ground most quickly? Robotics and automation, with the largest share of respondents who plan to spend $10 million or more.
Automation: Here to stay - but needs to fit
The intense struggle to source and hang onto labor and protect business continuity makes the consistency, efficiency, and safety benefits of specialty conveyors, automated guided vehicles, and other automation increasingly practical. But is the shift to automation and robotics a kneejerk reaction to a year of unusual labor and supply challenges, or is the paradigm here to stay? According to the report, the trend to automation will not slow down – the adoption of robotics and automation is predicted to jump from 38% to 76% of respondents in just the next five years.
With greater automation adoption on the horizon, the question becomes how to reap the full benefits through a solution that fits unique requirements. For example, specialized industries like automotive manufacturing and distribution have material handling requirements far different than e-commerce. But custom solutions to handle everything from tires to transmissions require automation partners with the specialized skill set and experience to bring the benefits of automation to fruition.
Looking for an automation solution customized to meet the needs of your operation? Whether handling bulky items or engineering around challenging space requirements, we can help. Reach out through our contact form or use the chat function below.