Blockchain, artificial intelligence, and robotics are some of the hottest technologies to grace the business stage, if the media is to be believed. Have they hit the mainstream in major industries though? We took a look at the state of adoption in the supply chain world, and here’s what we found.
Are Supply Chains Warming to These 3 Hot Technologies?
Media coverage of the supply chain sector, and indeed, industry in general, is abuzz with hype about the latest and greatest technologies, such as blockchain, artificial intelligence, and robotics.
Does the rate of adoption reflect the promise these innovations hold though, or is it a case of much talk and somewhat less in the way of action?
That’s a question best answered by studying trends in uptake across the many types of enterprise that rely on logistics and supply chain management to keep the revenue rolling in.
We’ve taken a look at the state of these talked-about technologies, and drawn the following high-level conclusions.
Are Businesses Busy with Blockchain?
Pundits claim that blockchain technology, a distributed and immutable system for documenting transactions, will disrupt the supply chain industry substantially over the next ten years or so. However, at this point, it is a solution employed mainly by the most significant industry players, and even then, is primarily applied on an experimental basis, albeit to solving a range of supply chain problems.
MHI recently released a report about the state of digital adoption in the supply chain world, which revealed that only around 10% of enterprises are actively using blockchain today. Rather more (62%) say they expect to implement blockchain solutions over the next five years.
Is the Industry Ready for Blockchain?
Of course, stated expectations mean little given the speed at which technologies are emerging, maturing, and being superseded, so the report doesn’t exactly hint at a meteoric rise in blockchain adoption.
Other sources highlight several hurdles obstructing the uptake of blockchain applications. The common theme that all commentators seem to agree on, is that there are few proven use-cases for the technology, with most projects still at the proof-of-concept stage, and that enterprise decision-makers are not sure about what problems it can solve and how it will do so.
In other words, despite all the hype, blockchain does not look imminently to become a mainstream supply chain management tool.
Is AI Adoption Advancing?
It’s interesting that in the MHI report mentioned above, blockchain is mooted to form part of the foundational level of a pyramid relating to digital transformation in the supply chain industry. In the same hierarchic schema, artificial intelligence sits at the very top, yet AI adoption, while currently slowing down, is by all accounts enjoying a much higher level of active use in supply chain organisations.
The slowdown is attributed, like the hesitant adoption of blockchain, to an absence of clarity among businesses, relating to the strategy for AI’s integration into their operations.
Nevertheless, artificial intelligence adoption rates are still healthy, with nearly 50% of companies claiming to have at least one AI capability in use, according to a 2018 report by McKinsey.
The report states that even among non-digitally-savvy enterprises, AI adoption is at 47%, while 67% of companies with high digital awareness have the technology in place. The following artificial intelligence capabilities are the most commonly adopted by supply chain organisations:
- Process automation
- Computer vision
- Machine learning
- Chat bots
- Speech and text understanding
While a lack of clear strategy is a stated reason for companies spurning blockchain, the same clarity issue surrounds AI. Curiously though, many companies have embraced artificial intelligence, even absent the strategies to exploit it.
The State of Robotic Readiness
Robotics could be lumped together with other AI capabilities when discussing technological adoption, but is probably deserving of a discrete appraisal, due to its visibility.
After all, everyone seems to have a reaction to seeing a robot hard at work, while many other AI elements are buried deep in a company’s server room or hidden in the cloud.
At Logistics Bureau, we’ve been following and reporting on the progress of warehouse robots in particular for at least the last couple of years. In that time, it has become apparent that robotics has serious potential for reducing supply chain costs and increasing efficiency, but is adoption on the rise, or is the reality less dramatic than the fantasy?
Yes, The Robots Are Rising
Amid camps divided on the question of whether or not human society should be worried about the potential for robots to steal jobs, digitally-driven automated equipment appears to be the most convincing success story of all in the supply chain environment.
“Like the rise of industrial robots in car manufacturing, automation is helping the supply chain industry respond to consumer pressures for faster service, more choices, and greater customization. Businesses that best leverage advanced automation and technology will become new market leaders.”
— Joel Reed, CEO, IAM Robotics
The MHI report highlights just how positively robotics are being received in the industry, with growth much more prevalent across larger enterprises. Unlike the other technologies discussed above, smaller businesses are not reticent to adopt robotics, but are still held back by ROI and cost concerns.
That’s a situation that appears to be changing though, with the advent of robotics-as-a-service (RaaS), which enables SMEs to access robotic hardware, control systems, and professional support on a pay-as-you-go basis.
Two Out of Three’s Not Bad
It seems then, that robots, while scary for some, are the current darlings of technological innovation in the supply chain, while less visible AI applications are finding a solid footing. Blockchain seems to have a less secure future, although the hype train is not slowing down.
Low levels of blockchain adoption would seem to correspond with the fact that more conventional centralized databases and ledgers still have more than enough to offer most enterprises.
Perhaps blockchain will simmer on the back burner until a few proven use cases—maybe Maersk’s shipping solution and Walmart’s provenance program—inspire confidence that it genuinely has something concrete to offer.