New Technologies Are Turning The Supply Chain Upside Down

DHL has published its latest research on digitization in the supply chain. The report shows that new technologies and solutions are developing rapidly and are turning the industry inside out on several fronts – with supply chains, mainly finding it challenging to keep up. A survey of almost 350 supply chain and operations experts shows that 95% of those surveyed do not fully exploit the potential advantages that physical, informational, and analytical innovations offer.

“Digitization and the supply chain: where are we and what’s next?” This is the latest report from Lisa Harrington, President of the Charrington Group LLC. The study commissioned by DHL looks at how the industry is dealing with the rapidly changing and disruptive environment created by the increasing digitization of supply chains. Next-generation robotics, AI, AVs, blockchain, big data analytics, and sensors are just a few of the technologies that companies today need to consider to integrate into their operations and supply chain strategies.

Among all respondents, 73% cited Big Data Analytics as one of the essential information and analysis solutions their company invests in. Big data is ahead of technologies such as cloud-based applications, which were named by 63%, and the Internet of Things (IoT), which 54% said. Blockchain was named by 51% of respondents, followed by machine learning by 46% and sharing economy by only 34%. For physical hardware, the preference was clearly for robotics. 63% of the survey participants rated this as the most important physical technology, ahead of AVs with 40%, 3D printing with 33%, and augmented reality and drones with 28%.

“There is no question that digitization has and will continue to have a significant impact on supply chains and operations around the world. Companies are faced with a growing number of options as new products and applications continue to emerge and gain acceptance in the industry. A targeted strategy for digitizing the supply chain is essential, on the one hand, to evaluate the new technological possibilities for yourself and, on the other hand, to find a way to make the best possible use of the advantages and thus to be one step ahead of the competition, “says Lisa Harrington, President of the Harrington group LLC.

Companies are slowly venturing into the unknown depths of digitization, with 39% of those surveyed reporting that they are developing one or more of their information or analysis solutions. Only 31% rely on biological applications. The reasons for the slow pace are symptomatic of traditional organizational change scenarios. 68% of supply chain and operations experts said reliability was one of the biggest problems for hardware technology applications. In comparison, 65% said their organizations were reluctant to change, followed by an inadequate return on investment or a bad return on investment at 64%. In ​​information and analysis solutions, 78% of respondents said that outdated processes or systems are the most significant obstacle.

Companies must digitize processes to meet the constantly growing requirements, increase efficiency and flexibility and improve customer satisfaction. The results of the study are also used internally to refine DHL Supply Chain’s digitization strategy further. With a clear vision and a comprehensive portfolio of critical technologies, DHL has already embarked on the journey of digitization and focuses its activities and investments on innovations that have the potential to solve real business challenges and explore new opportunities. 

For example, DHL is already using augmented reality in department stores to increase order picking efficiency. In addition, storage robots improve picking times and support employees with repetitive tasks such as packing. Software robots (robotic process automation) take over selected back-office processes. As part of the Internet of Things applications, innovative sensors provide customers with real-time information about the location and condition of their goods.

“The supply chain industry is at a turning point. Traditional systematics is being called into question by new hardware technologies and information and analysis solutions in an unprecedented way. Technology offers significant opportunities to reduce costs and increase profitability. But at the same time, it also means that companies that fail to face these challenges and risks will be left behind. Our customers increasingly expect us not only to accompany them during this time of upheaval but also to lead the way,” says José F. Nava, Chief Development Officer, DHL Supply Chain.

One example of how DHL is investigating future technologies is the topic of blockchain. Together with Accenture, DHL is testing a procedure to prevent counterfeiting of medicines, which, according to Interpol, kill millions of people every year. In this study, the blockchain is integrated into the pharmaceutical supply chain using a track-and-trace serialization system. In this way, a unique identifier can be recorded for each unit of a pharmaceutical shipment as it moves along the supply chain. This technology is still in its infancy, but it is already very promising and offers exciting customer applications.

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