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Robots, Reshoring and Resilience – Observations from MODEX 2022

David Shillingford | March 31, 2022

Having been at the [understandably] sparsely attended MODEX 2020, it was refreshing to see so many people in Atlanta this week for MODEX 2022, almost to the point that standing in line* was also refreshing! 

In talking to other attendees and exhibitors as well as in the Q&A during the two panels I participated in, there were several themes that reflect where we are as an industry and as a global community. 

Ukraine

As it has been now for weeks, the topic of Ukraine came up in many conversations.  Even if not being discussed, the dark cloud of the Russian invasion was hanging in the air.  Ukraine was the topic of the second panel that I participated in along with Kathy Fulton, Executive Director of the American Logistics Aid Network and Alan Amling, Distinguished Fellow at UT’s Supply Chain Institute.  Among other things, we discussed unknown Vs known risks, price risk Vs availability risk, how risk propagates through supply chains, global food security and emerging geopolitical risks.  The imperative for companies to obtain actionable intelligence (as opposed to news) and to gain visibility to sub-tier suppliers were central themes of the discussion.  In response to the question ‘is there anything good to discuss’ and in acknowledgement that this is first and foremost a humanitarian crisis, it was noted that the worst of humanity often brings out the best humanity as the population of other European countries take hundreds of thousands of complete strangers fleeing Ukraine into their houses.   

Covid

The keynote address by CNN’s Dr Sanjay Gupta discussed the lessons learned from Covid-19 and what nations across the globe and individual firms can do to prepare and be ready for future pandemic and health-related disruptions.  The first panel that I joined also covered lessons from Covid-19 but with a specific focus on supply chain supply and demand disruptions.  Along with Kathy Fulton and Rick Blasgen, the past President and CEO of CSCMP, we discussed why and how some companies were better prepared to react to the pandemic, how the level of investment in visibility and risk analytics capabilities has exploded and the role of government in supply chain resilience.  The hope is that this represents the bookend to the panel that we did at MODEX in 2020 in which we described the Coronavirus (as it was being called then), its potential spread and its likely impacts on global supply chains.

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Robots and Reshoring

As with every year that I have attended MODEX, there were more robots on the floor and more examples of demonstrable ROI from automation.  The demand for physical automation of certain supply chain processes has been growing for years but the pandemic-induced acceleration of e-commerce and workforce constraints has put this into hyperdrive as has the ‘great resignation’.  Automation will also play a critical role in bending the cost curve to enable the necessary reshoring of certain types of manufacturing, a topic that was discussed on both panels that I joined. 

Digital Supply Chains

The other category of exhibitor that grows year-on-year are those companies helping companies digitize, and sometimes automate, the flow of data and decision-making.  Warehouse optimization solution companies (and consultancies) are expanding further into network optimization and the deployment of other digital solutions.  IoT devices are beaming data to the cloud to power analytics that enables management by exception.  TMS companies are moving more clients to cloud-based solutions.     

The Concern

Demand for automation was not the concern of the exhibitors that I spoke to, sales and sales pipelines are better than they have ever been.  The concern that I heard from many (once it was clear that I was not a buyer of their product) was their company’s ability to fulfil the orders that were being taken on the show floor.  The companies that are best able to navigate the ongoing Covid disruptions, chip shortages, raw material risk stemming from the invasion of Ukraine and other risks will be the winners.  It is certainly the first time that a salesperson at MODEX has said to me “hey, I’ve got to get you connected to my supply chain team”.

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Confirmation

With these interactions it did not come as a surprise that MHI’s 9th Annual Industry Report “Evolution to Revolution: Building the Supply Chains of Tomorrow” that was released during the show reported that: 

– nearly 80% of supply chain leaders say their digital transformation has accelerated due to the pandemic,  

– investment in supply innovation over the next two years is expected to rise dramatically and much of this will be to improve agility and efficiency, 

– supply chain disruptions and shortages rose to be the top concern (57%). Talent issues (54%) and customer demands (51%) remain top challenges and are exacerbated by ongoing disruptions. 

– and a ‘lack of a clear business case to justify the investment’ was cited as the leading barrier to technology adoption.   

You can download the complete report at https://www.mhi.org/publications/report.  

Conclusion

Rick Blasgen summed it up well during Monday’s panel when he said that the pandemic has shown supply chains to be incredibly resilient.  Sure, there have been delays and bottlenecks but goods have still made it to market. The enthusiasm and innovation on display on the show floor reflected this and the notion that supply chain professionals are exceptionally good at solving big hairy problems. 

* but that may just be the British in me so I should probably call it queuing.

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