Most companies are not fully capitalising on digitalisation tech, notes report

Nearly all supply chain and operations professionals are not fully capitalising on digitalisation technologies, according to new research from logistics company, DHL.

The research, ‘Digitalization and the supply chain: Where are we and what’s next?’ is a report by Lisa Harrington, president of the lharrington group LLC commissioned by DHL, included 335 supply chain and operations professionals and looked at how industry is coping with the fast-changing and disruptive environment posed by the rise of digitalisation in the supply chain.

Participants of the report were asked about the importance of next generation technologies, both software and hardware, that are becoming integral to operations, such as blockchain, artificial intelligence (AI), sensors and big data analytics.

Big data analytics was ranked as the most important information solution with nearly three-quarters (73%) of respondents reporting that their company was investing in this technology. Next in importance was cloud-based applications at 63%, the Internet of Things (IOT) at 54%, blockchain at 51%, machine learning at 46% and the sharing economy at 34%.

Nearly two thirds (63%) of respondents rated robotics top out of the physical hardware, followed by AVs at 40%, 3D printing at 33%, and augmented reality and drones at 28%.

“There is no doubt that digitalisation is having an incredible impact on supply chains and operations across the globe and is here to stay,” revealed Lisa Harrington, president, lharrington group LLC. “Companies are faced with many options as new products and applications enter the market and gain acceptance in the industry. Having a purposeful strategy for supply chain digitalisation is now essential to assess the new technological landscape and chart a way forward to reap the benefits and stay ahead of the competition.”

Additionally, the report found that while companies are beginning to test the water with new technologies it is still at a slow pace, with 39% reporting a development in one or more information/analytics solution and 31% doing the same for physical applications. This sluggish adoption was attributed to reasons that are symptomatic of traditional organisational change scenarios. For hardware technology applications, 68% of respondents were most concerned about reliability, while 65% reported a resistance to change in their organisation followed by insufficient or prolonged return on investment at 64%. Comparatively, for information and analytics solutions, 78% of respondents reported that organisational siloes and legacy systems were the top impediments, followed by a lack of specialised talent expertise at 70%.

“This is a transformative juncture for the supply chain industry,” explained José F. Nava, chief development officer, DHL Supply Chain. “The traditional model is facing unprecedented levels of disruption from new hardware technologies combined with information and analytics solutions. Technology offers considerable opportunity to reduce cost and improve profitability but it also means businesses that fail to adapt risk getting left behind. Our customers are increasingly looking to us to lead the way during this transition.

“One example demonstrating how DHL is also looking into future technologies is blockchain, where we are partnering with Accenture to test a concept that is aimed at preventing the counterfeiting of drugs, which Interpol estimates kills one million people each year. This trial incorporates blockchain into the pharmaceutical supply chain via a track-and-trace serialization system. This allows us to securely capture the unique identifier of each unit of a pharmaceutical shipment as it moves through the supply chain. The technology is nascent, yet promising, and we are excited about the opportunities it could bring to our customers in the future.”