With the global supply chain only growing in scope and significance to world trade, it should come as no surprise that it's a center for significant investment these days. However, the sheer volume of that influx of dollars - into both operations and research for future innovation - may be stunning even to those well-versed in the ins and outs of daily operations.
As of early September, supply chain and logistics startups had reaped some $12.47 billion in funding in 2019, and are on pace to exceed the $13.59 billion total of 2018, according to new research from CB Insights. That gives the industry nearly an entire quarter to surpass the sector's all-time investment high. Moreover, it appears the number of dollars per investment deal made is on the rise, because only 416 such agreements had been made through Sept. 9. That was down from 520 last year (also a record), and it may be more difficult to bridge that gap than the dollar value.
Before 2018, the previous high for deals was 454, set in 2017. In terms of sheer dollars, it was about $9.06 billion, observed in 2016, the report said.
One major investment in the idea of supply chain innovation comes in Chicago, where the global shipping titan DHL recently opened a new facility to teach partners about the latest and greatest in logistics tech, according to Supply Chain Dive. The company's Innovation Center, which measures some 28,000 square feet, includes everything from the use of automated vehicles and robots to broader application for devices in the internet of things.
"Chicago was picked as the location for the Innovation Center for two main reasons," Gina Chung, the head of Innovation Americas for DHL, told Supply Chain Dive. "One is just Chicago's relevance in the logistics industry and the logistics ecosystem in North America; [it is a] gateway for road freight and for rail freight here in the U.S. so there's a lot of rich logistics history, as well as the current logistics operations taking place here."
In addition to learning what's available, companies will also be able to talk with DHL experts about their own unique problems so they can either find the solutions that work for their specific issues, or kick ideas to tackle later up the corporate ladder, the report said. The hope is that, within the next five years or so, there will be greater implementation of digital technologies from companies at every step of the supply chain.
What comes next?
Experts note that with increased digitization not only comes easier use of existing tech, but also the potential for even greater efficiency, according to Supply Chain Brain. The reason why is simple: Right now, the artificial intelligence systems that examine supply chains have huge gaps in their knowledge because there aren't enough companies providing the necessary data to make more effective, actionable decisions. With more information becoming available, broader applications for AI and the suggestions these systems make could revolutionize the global supply chain.
As such, those within the industry would be wise to continually monitor the new developments that come along as funding of innovation only picks up speed.