MHI industry survey: Keynote highlights supply chain impact of rising consumer expectations

By Roberto Michel, Editor at Large

The results of the 2015 MHI Annual Industry Report were released at Wednesday’s ProMat keynote, with some of the biggest findings from the report’s survey being pricing pressure combined with ever growing customer expectations for a faster, better experience.

“Supply chains continue to face constant pressure to do more with less,” said Scott Sopher, principal with Deloitte’s supply chain practice, and co-moderator with George Prest, CEO of MHI, while also meeting the needs of connected consumers who are demanding a “cheaper, faster, better experience.”

According to this year’s survey, customer pricing pressure (51%), demands for faster response times (50%), and rising customer service expectations (49%) are the top three issues supply chain leaders find very or extremely challenging. “The alignment between supply chain and customer care is critical, perhaps more so than ever before,” said Sopher.

The keynote was a panel format, with Sopher and Prest posing questions to a group of industry leaders consisting of Bill Abernathy, head of PSNA Logistics Excellence for Bayer CropScience; Randolph L. Bradley, technical fellow of supply chain management for The Boeing Co.; Brian Hancock, SVP supply chain for Family Dollar Stores; John Hill, director at The St. Onge Co; Jon Rader, manager of design engineering for FedEx SmartPost; Art Roman, director of design and construction at US Foods; and Gregg Schweir, EVP and VP of R&D for La-Z-Boy.

The panel discussed the applicability of the eight key technologies identified in the report as potential drivers of next generation supply chains. These technologies are inventory and network optimization tools, sensors and automatic identification, cloud computing, robotics and automation, predictive analytics, wearable and mobile technology, 3D printing, and driverless vehicles/drones.

The panelist’s advice included a point made by Schweir, which was to just “get started” with some of these technologies, but at the appropriate level of cost and complexity for your operation. Hill advised companies should look to improve and reconfigure their basic processes first, and then layer in the appropriate technologies.

Hancock said he sees predictive analytics of e-commerce buying as the biggest game changer, since supply chain professionals will have to meet the fulfillment requirements that flow from these patterns. As examples, he brought up how music retailers can drive predictable sales based on social media alerts of a new album being released, or how apparel retailers can predict how many ties they will sell from repeat customers buying dress shirts online.

These patterns can be analyzed to pinpoint the best supply chain response, Hancock suggested, so leaders have to look at how to marry predictive analytics with their order fulfillment processes. “We need to understand this new world [of analytics],” said Hancock. “That’s where we need to dance.”