The pandemic may not yet officially be over, but based on the attendance at the ProMat show last week in Chicago, people are definitely ready to get up close and personal again with exhibits of material handling and logistics equipment. According to MHI, which hosts the bi-annual ProMat event (alternating with MODEX in even years), ProMat 2023 had over 50,000 attendees, a new record for the show, and over 1,000 exhibitors.
If one word was heard more often than any other at the show, it was undoubtedly “automation.” Virtually every solution on the show floor either featured some element of automation or had been designed with automated processes in mind.
In an opening keynote panel discussion, Rachel Cox, director of supply chain strategy with Grupo Bimbo, set the stage for the week ahead by explaining, “Automation does not mean a reduced labor force. It means increased efficiencies and more targeted customer service.”
That being said, the two words heard most frequently at ProMat 2023 were probably, “labor shortage,” as the perennial problem of finding, developing and retaining talent throughout the supply chain seems to have only gotten worse since the last time ProMat was held in person (April 2019). And that definitely is a factor in the increased interest in automation, robotics and artificial intelligence (AI) for material handling and logistics applications.
According to Thomas Evans, robotics chief technology officer with Honeywell Safety and Productivity Solutions, automation isn’t just an opportunity for companies with the deepest pockets and largest tech budgets. “Robotics could be a game-changer for mid-market companies to longer be so reliant on labor productivity,” he observed. As supply chain solutions enter the advanced AI era, the old term of “lights-out facilities” is being replaced with the newer term, “dark warehouse.”
In the 2023 MHI Annual Industry Report produced by MHI and consulting firm Deloitte, a survey of over 2,000 supply chain and manufacturing leaders revealed that the top two supply chain challenges facing companies are hiring/retaining qualified workers (57% of respondents) and the talent shortage (56%). In a panel discussion centered on the results of the survey, Kristi Montgomery, VP, innovation, research & development with third-party logistics provider (3PL) Kenco Group, said, “Challenges with labor are not being met with people. So we need to augment that shortage with automation. Young people just are not excited about working in warehouses.”
Investing in supply chain technology of all types—not just automation—looks to be one of the key strategies companies plan to adopt to keep their supply chains moving, even in the face of labor shortages. As John Paxton, CEO of MHI, pointed out, 90% of survey respondents plan to invest more than $1 million on technology over the next two years, a huge increase from the 66% who said the same thing a year ago.
Post-pandemic optimism coupled with frustration over labor challenges no doubt are behind the big push for technology. But as Paxton pointed out, “Tech investment is only part of the equation. [Companies need to have] an innovative culture and the right people in place to implement innovation and to bring it all together to exceed their customer demands and expectations—whether they are fast delivery, personalization, low cost, delivery transparency, or sustainability goals.”
AI and the Internet of Things are the top two technologies predicted to have the greatest impact on supply chains, according to the survey, with autonomous vehicles and drones coming in third on the list. Curiously, though, driverless vehicles and drones came in dead last when survey respondents were asked about their own companies’ adoption of technologies, perhaps an acknowledgment that the business case for such solutions—as well as the technical capabilities—aren’t yet ready for real-world deployment on a wide scale.
As usual, blockchain and 3D printing remained at the bottom of the list of technologies likely to have significant impact on supply chains in the near term.
While automation may be the flavor of the year, the ultimate goal for any company’s supply chain efforts should be “uncommon collaboration,” said Amanda Davies, chief procurement and sustainability officer with Mars Wrigley. “If you really want to successfully collaborate with your supply chain partners, you need to have empathy. Stand in the shoes of your partners, and learn to see the world from their perspective.”
