The holidays are here, 2021 is almost over, and it’s time for this year’s Material Handling year in review! Last year, we dug into COVID-19’s effect on 2020’s supply chains and praised the innovation and resiliency of the material handling industry. The way the industry was able to come together to find new solutions to new problems to keep critical supply chains intact was impressive, and ultimately helped save lives.
This year, things have changed once again. Supply chain disruptions were expected during the onset and initial height of COVID-19. However, to see such prevailing and persisting issues nearly two years after the pandemic’s initial shock of lock downs has been surprising. At the time of writing this, a simple “supply chain disruptions” google search will net results from every primary news network and journalistic publication describing the current issues facing our economy. And going into the holiday season, most if not all of us have experienced these disruptions in one way or another with shipping delays and missing inventory.
So, what does this mean for the material handling industry? Here are our three biggest takeaways from 2021 and all the supply chain disruptions that came with it.
Digitization builds resilience in supply chains.
A major cause of ongoing disruption in supply chains is simply a lack of digital infrastructure that helps companies deal with unexpected situations and obstacles. This digital infrastructure includes technologies like:
- Artificial Intelligence (AI)
- Cloud Computing and Storage
- Driverless Vehicles and Drones
- Internet of Things (IoT)
- Inventory and Network Optimization
- Predictive Analytics
According to this year's MHI’s annual industry report for 2021, “83% of supply chain leaders believe digital will become the predominant model in the next five years; 22% say it already is.” The report even goes as far as describing which the technologies most utilized by supply chains currently, including “cloud computing and storage (57%); inventory and network optimization tools (45%); sensors and automatic identification tools (42%); and robotics and automation (38%).”
These new digital solutions are all geared towards helping companies execute the “Respond, Recover, Thrive” cycle with greater efficiency, minimizing the effects of disruptions.
Companies are turning to robotics and automation to combat labor shortages.
Labor shortages across all industries, not just material handling and warehousing, have risen to the forefront of the public eye in 2021. The Carter blog recently published a two article series, The Material Handling Labor Update, describing both the current problems faced and future predictions, as well as our expert’s proposed solutions moving forward. In the solutions article, we talk directly about robotics and other warehouse automation solutions becoming more prevalent across the industry, and we see that in the annual industry report from MHI as well.
The report states that of those surveyed, 57% of those surveyed plan to spend more than $10 million on robotics and automation in 2022. Robotics and automation reduce supply chain dependency on manual labor. They seek to replace menial, repetitive, injury-prone, and error-ridden tasks around the warehouse with robotics or other automated processes. In doing so they protect companies from sudden shifts in available labor or rising costs of labor, ultimately increasing the overall resiliency of the supply chain.
Supply chain disruptions are the new, new normal.
Did you think you were done hearing the phrase “new normal?” Well, think again. Supply chain disruptions are here to stay.
A group from Carter Intralogistics attended MHI’s annual conference this year. In the opening session, "Becoming a Catalyst for Digital Transformation," Deloitte's Brock Oswald spoke on recurring supply chain disruptions. The big takeaway: ALL supply chains are interconnected and interdependent, and whether we like it or not, it's a more fragile relationship than we think. Out of 2200 global c-suite executives surveyed, more than 1600 (72%) strongly believe supply chains will continue to see occasional or regular global disruptions similar to the one caused by the COVID-19 pandemic.
Thank you for another great year.
This is our last post for 2021. We appreciate you taking the time to tune into the Carter Blog throughout the year and hope you find it as interesting and educational to read as we find it fun to write and maintain. From the Carter family to yours, we wish you the best of luck in 2022 and a happy holiday season.