Technology investment accelerates in supply chains says new report
Just under half of logistics companies have accelerated their technology roadmap and 57% of LSPs are increasing tech spend
According to Reuters Events: Supply Chain and CalAmp’s new Emerging Out of the Pandemic Supply Chain Report, which is free to download now here, the arrival of COVID-19 is causing an acceleration in technology investment and adoption.
In a survey conducted for the report, which drew responses from nearly 600 supply chain executives, less than 10% of Logistics Service Providers (LSPs) and 12% of shippers said that they had seen technology spend decrease. Instead, a majority of LSPs (57%) said that they were increasing technology spend, as did 48% of shippers, with 11% in both cases revealing that they would increase spend ‘significantly’.
Both shippers and LSPs were also asked whether they had changed their technology roadmap in response to COVID-19. In both cases just under half said that they are accelerating their technological adoption as a result of the pandemic, with 48% of shippers noting that they are moving up their schedules and 49% of LSPs.
It is clear that the disruption brought on by the pandemic is causing many to re-evaluate their processes and workflows in order to mitigate future risk and make for open and adaptable operations. Already, 62% of shippers noted in the report that they had started or completed a recovery assessment as a result of coronavirus, as had 50% of LSPs. A further 34% of shippers and 44% of LSPs noted that this kind of assessment is going to be important but they had yet to engage in the exercise.
“Over the next 18-24 months, I expect to see a renewed push for digital transformations that are focused on improving the visibility into consumer demand, tier-1 and sub-tier supplier performance & risk, inventories, and forward/reverse logistics,” said Jeff Newman, Vice President, Supply Chain Visibility Solution Sales of CalAmp. “The increased visibility will also make the supply chains nimble to enable faster business innovation.”
“We’ve always been focused on three main areas of innovation, which we believe will become even more relevant in a post-COVID-19 world,” explains Erik Caldwell, Divisional Chief Operations Officer, XPO Logistics - Supply Chain (Americas & Asia Pacific) in the report. “The first is dynamic data science. The second is intelligent logistics automation, which has been driven by the employees to make the warehouse safer and more efficient. The third priority is the digitalization of transportation and the customer experience. These are trends we already saw before COVID-19, and that are accelerating now.”
For Bill Driegert, Head of Operations, Uber Freight, “The reality is that legacy transportation technology and the limitation of traditional supply chain practices are no longer enough to keep pace with the market. But in many ways, the widespread impact of COVID-19 has been a forcing-function for innovation, and shippers for whom digital transformation wasn’t a top priority are suddenly moving quickly.”
Click here to download the complete report for free and get direct insights to 587 supply chain executives’ responses.
Click here for an in-depth feature on how the pandemic is driving the need for greater automation in supply chains from top robotics experts.