Despite all the focus on digitalization of the supply chain, 83% of 305 executives surveyed by the consulting company PwC say that their supply chain technology investments have not fully delivered expected results.
The reasons, according to “PwC’s 2023 Digital Trends in Supply Chain Survey,” range from the implementation process not yet being finished and it therefore being too early yet to judge results (21%) to undefined ownership and vision (4%).
A wide variety of technologies are being implemented in supply chain operations with cloud technology and the internet of things (IoT) topping the list of most common implementations, according to the survey. Eighty-four percent of respondents have either partially or fully adopted cloud technologies, and 79% have implemented IoT. Other popular technologies include scanning and intelligent data capture and third-party spend analytics. Further down the list are drones, augmented reality, and robotics or robotic process automation. Less than half of respondents say their companies have fully or partially adopted these technologies.
The report authors believe the failure to see expected results lies not with the technologies themselves but with a lack of effective planning on the part of the company. “Technology initiatives typically do not have a well-articulated value delivery plan—and therefore struggle to meet expectations and end up with a 'go live' being the sole marker of success,” says Matt Comte, PwC Operations Transformation Practice Leader.
In spite of lack of satisfaction with current tech implementations, companies are still forging ahead with future ones. Looking ahead, the technologies that will be seeing the most investment in the future are artificial intelligence and machine learning. Twenty-two percent of respondents said their companies plan to invest at least $5 million in those technologies in the next two years.
It makes sense that the implementation of new technologies will require significant training Indeed, more than two-thirds of survey respondents expect that supply chain digitalization will require some “upskilling” of employees.
The training required, however, needs to go beyond simply learning how to access the technology and generate reports. “Operations have evolved from a role-based process to one that requires workers to evaluate conditions and use new sources of data to analyze and take action,” says report co-author Carla DeSantis. “It takes an expanded skill set to approach a changing landscape with agility. While the prospect can be overwhelming, building a workforce that can adapt to diverse ways of working, particularly through technology, is critical for maintaining agility in your supply chain.”
Despite that need (and the realization that digitalization requires upskilling), only 7% of survey respondents said digital upskilling was a top priority. That is a mistake if companies want to avoid future disappointment when it comes to technology implementations. “We’re seeing organizations struggle with technology investments because they haven’t changed the way they work alongside that tech. Instead, they’re prioritizing increasing efficiency and cutting costs alone,” says DeSantis, who is a PwC Operations Transformation Partner.