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Is this the future of supply chain automation?

As Amazon continues to set the bar for efficiency by integrating an astounding spectrum of automation technology, it’s becoming increasingly apparent that traditional supply chain models are ripe for disruption.

For this reason, companies around the world are now rethinking their warehouse and distribution systems, with automation taking center stage.

The infographic below from Raconteur highlights the state of automation across global supply chains, while also providing an outlook for future investment.

Long time coming

Let’s start by taking a look at what supply chain technologies are priorities for global industry investment in the first place:

Rank Technology % of Companies* Investing in Tech
#1 Warehouse automation 55%
#2 Predictive analytics 47%
#3 Internet of things 41%
#4 Cloud logistics 40%
#5 Artificial intelligence 28%
#6 Blockchain 22%
#7 Autonomous vehicles 16%
#8 Machine-learning 16%
#9 Fulfillment robots 11%
#10 3D printing 10%
#11 Augmented reality 7%
#12 Drones 7%
#13 Crowd-sourced delivery 6%
#14 Virtual reality and digital twins 6%
#15 Delivery robots 4%

*Based on survey of supply chain professionals in retail, manufacturing, and logistics fields

As seen above, warehouse automation has already received more investment (55%) than any other supply chain technology on the list, as companies aim to cut delivery times and improve overall margins.

Interestingly, other areas receiving significant investment—such as predictive analytics, internet of things, or artificial intelligence—are technologies that could integrate well into the optimization of supply chain automation as well.

Smoothing the transition

While fully automated supply chains in most industries may still be a few years away, here is how companies are investing in an automated future today:

Timeline For Acquiring New Automation Tech % of Warehouse Managers Surveyed
Already have 23%
Have, looking to upgrade 8%
Within 12 months 10%
One to three years 21%
Three to five years 8%
Over five years 3%
Not looking 26%

 

According to the above data, over 70% have already integrated automation technology, or are planning to within the next five years. On the flip side, over a quarter of warehouse managers are not currently looking to integrate any new automation tech into their operations at all.

Adoption rates and growth

As supply chain automation gains momentum and industry acceptance, individual processes will have varying adoption rates.

Take order fulfillment, for instance. Here, only 4% of current operations are highly automated according to a recent survey from Peerless Research Group:

Order Fulfillment Operations (Picking and Packaging) Percentage of Respondents
Highly automated 4%
A mix of automated and manual processes 42%
Mostly or all manual 49%
Not applicable 5%

 

It’s worth noting that other individual supply chain components, such as conveyor belts, storage, automated guided vehicles, and shuttle systems, will all have differing trajectories for automation and growth.

Post-COVID supply chains

The COVID-19 pandemic has shown us that complex supply chains can become fragile under the right circumstances.

As supply chains see increased rates of automation and data collection becomes more integrated into these processes, it’s possible that future risks embedded in these systems could be mitigated.

  • Dorothy Neufeld is a financial writer based in Canada. This article originally appeared on VisualCapitalist.
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Dorothy Neufeld
Dorothy Neufeld
Dorothy Neufeld is a financial writer focused on capital markets and geopolitics.

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