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Making The Business Case for NextGen Supply Chain Investments

* By Fiona Soltes *

It’s generally understood that the digital, “NextGen” supply chain will be the predominant way of operating in coming years. Still up for debate, however, is when that expectation will finally become reality.

“The adoption rate has not been progressing as fast as everybody anticipated five years ago,” admits Scott Sopher, principal and leader of the global supply chain practice, Deloitte Consulting LLP. Deloitte has again collaborated with MHI for the 2018 MHI Annual Industry Report, and this year, hits the obstacles to adoption head on. It’s titled, “Overcoming Barriers to NextGen Supply Chain Innovation,” and aims to empower supply chain officers with the tools to rise above.

Among those barriers is the challenge of establishing a business case for disruptive technologies, including estimating the full benefits and costs involved. The result, all too often, is “underinvestment and limited action.”

Sopher and others, however, believe that doesn’t have to be the case. Moving forward means setting clear vision, thinking big and starting small, understanding the costs of inactivity/indecision, exploring pilot programs and strategic partnerships and, perhaps, creating a culture of innovation if one doesn’t already exist.

“There are numerous articles about the mechanics of building a business case,” the report states. “However, the key to constructing a successful business case for breakthrough innovations will not be found there.”

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According to the recently released 2018 MHI Annual Industry Report, “Overcoming Barriers to NextGen Supply Chain Adoption,” eight out of ten survey respondents believe these supply chains will be the predominant model within just five years. However, the report found that the adoption of some of these technologies was slower than originally reported when MHI started the annual report in 2014. The report cites three top barriers to adoption of these technologies: 1. Making the business case for NextGen supply chain investments. 2. Tackling the supply chain skills gap and workforce shortage. 3. Building trust and security in digital, always-on supply chains. This issue of MHI Solutions focuses on the adoption of these digital solutions, from best practices in robotics and artificial intelligence to blockchain and innovations in last mile delivery.

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