Technology is a means to an end, not an end in itself
Supply chain's core purpose is to unlock growth and opportunity, not digitisation.
Since the mid-90s, with the advent of accessible and exponential technology development, thought leaders within every field have touted the need for digitisation as the antidote to all ills. Arguably, this race to adopt the latest technology has left a battleground scattered with failed organisations, who lost sight of their core value-creating levers in their pursuit of digitisation, and suffered the ultimate price.
At its heart supply chain was, and still is rather simple. Place the right product, in front of the right consumer, at the right time and price point. As business, and the field itself has gotten smarter, and as globalisation has broadened the marketplace, this once simple concept has become more and more complex. The latest Barloworld Logistics supplychainforesight reviewed local perspectives regarding the adoption of key technology trends in supply chain with somewhat unexpected results. Local opinion seems to indicate that in the main, organisations are hesitant to invest heavily in trends that are as yet untested in the South African landscape.
According to Tyrone Rennie, Executive Solution Development and Marketing, at supply chain specialist, Barloworld Logistics, rather than indicating short-sighted, laggard behaviour, the wait-and-see approach to technology being adopted by local organisations may be wise. The rapid pursuit of technology, without a real understanding of the practical application thereof, is likely to be ill-advised. Organisations would do well to critically analyse the fundamental drivers of value within their supply chain, and indeed their greater market before embarking on a digital revolution.
"The relentless pursuit of the latest and greatest technology may not be a driver of competitive advantage in a world where technology is a given", says Rennie. "Getting the basics of value creation right and overlaying these with relevant solutions, be they traditional or technology-heavy, is what ultimately separates the winners from the rest. Intrinsically value creation is not about the latest tech, but more about the systematic application of solutions where, and indeed, if they make sense".
"Within a local context organisations need to face the realities and unique nuances of their marketplace. For example, respondents to our latest research indicated that autonomous vehicles are not on their business agenda for the near and even medium term," says Rennie. "This approach makes sense, as local infrastructure is unlikely to support widespread use of such vehicles on our national road network. It is more likely that with smart evaluation of internal operations autonomous vehicles such as self-driving forklifts or drones could augment efficiencies within warehousing and stockyards, rather than eradicate the need for drivers with the transport industry as is predicted by many pundits."
Despite the muted enthusiasm of respondents to supplychainforesight, there is no doubt that the technological revolution within Supply Chain is a reality. However, to leverage the opportunities technologies is likely to provide careful evaluation of processes is required to apply value-creating solutions where they make the most sense selectively. The rapid evolution of technology and its potentially disrupting results have created a tendency for many organisations to place a heavy reliance on these solutions, while perhaps neglecting core value drivers. Millions are invested in technology, in attempts to solve problems that may have been addressed creatively and cost-effectively.
"Technology should be an enabler of value and not the driver of it. A deep analysis into what an organisation wants to achieve, together with identifying challenges intrinsic to these objectives, may bring to light various solutions, some of which may not be technology driven," says Rennie. "Technology is a tool for achieving business objectives but not necessarily the answer in itself."
Technology alone isn't the cure-all, the people and solutions behind its application are what will continue to bring forth value - even in a continually digitised economy.