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  First Thoughts

    Dan Gilmore

    Editor

    Supply Chain Digest



 
June 14, 2024

Highlights of the 2024 MHI Annual Report


It’s All about AI?


For 11 years now – I can’t believe that many years have passed - material handling systems trade group MHI has partnered with the consultants as Deloitte to deliver an annual supply chain study, based on a large survey of industry professionals. The report - as with its predecessors (see below) – is released each year around the time of MHI’s major trade show (ProMat in odd years, MODEX in even years).

Prior to that, MHI produced its own annual report, which mostly dealt with data about the ups and downs of material handling equipment sales (and was often quite interesting).
So this week I belatedly waded into the 2024 edition, which comes in at about 45 pages.

Gilmore Says....

 
I did like an opening quote from MHI CEO John Paxton: The focus on technology in supply chains is undeniable. But supply chains are run by people, and human-centricity is the key.”

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I did like an opening quote from MHI CEO John Paxton: The focus on technology in supply chains is undeniable. But supply chains are run by people, and human-centricity is the key.”
That’s a good way to put it.

About 1700 supply chain managers took the survey. That’s a huge number. The report is also focused on 11 mostly new age technologies, which are: artificial intelligence, cloud computing, the Internet of Things, sensors and automatic date collection (not new age), robotics and automation, wearable and mobile technologies (not new age but with interesting developments), blockchain, autonomous vehicles and drones, 3D printing, advanced analytics, and inventory/network optimization (not new age).

The report says that adoption of these 11 categories of technology is predicted to rise dramatically over the next five years. We’ll see.

As with virtually every study, the survey asked about supply chain challenges. The top issue cited, based on the combined total of respondents saying each was either extremely challenging or very challenging, was inflation. The rest of the top 5 were: (2) the talent shortage; (3) customer pressures are various sorts (cheaper, faster); (4) somewhat unexpectedly, understanding customer behavior; and (5) adopting technology with current talent).

The only other real surprise to me was the that cyber security was third from the bottom in the list of about 20 challenges. I believe It’s a more important concern than that placement – maybe the feeling of respondents was that it’s IT’s problem.

There are then a number of sections on various topics – heavy on AI. These are in front of another section on supply chain trends. I will try to pick out a highlight or two from each section, starting with “How is GenAI Driving the Collaborative Supply Chain?”

The report states that “One key area where GenAI is having a particularly large impact is resiliency, which remains a top priority for many supply chain owners and specialists.”

I was looking for some detail on just how that resilience improvement is happening, but I could not find any explanation.

Next up: “Implementing Generative Collaboration.”

Let’s start with defining what generative collaboration is. The report says that it has to do with “figuring out how to combine AI with collaboration to empower workers and drive tangible results.”

Workers need to collaborate with the machines, the report says, with AI somehow “conforming human behavior.” AI can also assist “supply chain leaders leverage vast amounts of information to make data-driven decisions that optimize their business processes and deliver tangible results,” the report says. Whew.

Next up: “The Human-Centric Collaborative Supply Chain,” and here I was interested in how this synched up with the previous section.

The report introduces that concept of “learning in the flow of work.” With this concept, work and learning converge, “allowing workers to access the right data and knowledge through the right tools - when and where they need iwithout disrupting their daily workflow,” according to the report.

Further, learning in the flow of work embeds learning into the day-to-day work itself, instead of
taking workers away from their jobs for dedicated training. Somehow, AI is (of course) is also involved.

Finally, we get the “Value of Automation to Mitigate Risk and Improve Adoption,” which is more about AI.

For example, the report says that “AI has the potential to communicate information in
ways that are highly relevant, accurate, and timely - without human intervention. In transportation operations, for example, we envision a world where AI systems will learn the type of information that carriers need during a load lifecycle (e.g., how weather and traffic might affect route changes),” and could somehow lead to significant improvements in service levels and route optimization.

I am going to end it here for this week, but will be back next week to summarize the trends sections and calls to action for supply chain execs.

But being frank, the report thus far, while containing interesting nuggets here and there: (1) is way too much AI-focused; (2)relatedly, drifts too far afield from core materials handling.supply chan issues/trends; and (3) has graphics that are very fuzzy, making it difficult to see.


I call them like I see them.


What is your reaction to this review of MHI's 2024 report? What would you add? Let us know your thought at the Feedback section below.


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