We all know the saying: The more things change, the more they stay the same.
This is certainly true in supply chain and logistics. I’ve been an industry analyst for more than 20 years and I’ve seen a lot of changes (just to name a few):
- The evolution from desktop, client-server applications to software-as-a-service, cloud, and mobile apps.
- The move from 5-day delivery being the standard to next-day delivery becoming the norm today (with same-day delivery around the corner).
- The growing use of robots and more flexible automation systems in the warehouse.
- The convergence of business models between third-party logistics providers (3PLs), software companies, and consulting firms.
- “Data Scientist” becoming a hot job in logistics.
And when you look ahead, more changes are on the horizon (just to name a few):
- Drones, driverless trucks, hyperloop as new delivery modes.
- The shift from Chief Supply Chain Officer to Chief Networks Effects Officer.
- AI, Machine Learning, and Robotic Process Automation becoming more ubiquitous.
- More uncertainty in global trade (e.g., ongoing trade wars, collapse of WTO).
But despite all of these changes, so much has stayed the same too.
So this year, instead of making predictions like “Walmart Will Buy FedEx to Compete with Amazon” or “The Consolidation of Digital Freight Brokers Begins,” I am going to make some totally predictable predictions.
That is, instead of predicting what might change in the year ahead, I am going to predict what will likely stay the same yet again.
Excel will remain the king of supply chain applications
You will find Excel in every nook and cranny of supply chain management. It is like a cockroach that refuses to die despite decades of software innovation.
Look in your email inbox right now. Chances are you have an email with an Excel spreadsheet attached — with 10 or more people probably copied on that email!
Why is Excel such a hard habit to break? I answered this question six years ago in 5 Reasons Why Excel Is Champ Of Supply Chain Apps. Simply put, Excel is easy to learn and use; quick and easy to configure; highly portable and ubiquitous; and inexpensive. In other words, everything that most supply chain applications are not (at least not historically).
Companies will continue to struggle with poor data quality
More than five years ago, I wrote about how we have a “Big (Crappy) Data Problem In Supply Chain Management.” Since we are generating way more data today than five years ago, the data quality problem has gotten worse (or at least, it hasn’t gotten any better).
For example, we asked our Indago members earlier this month how they would rate the quality of the data they get from their external trading partners. More than two-thirds of our member respondents (68%) rated the quality of the data they receive from external partners as “Average,” with another 24% rating it “Poor” or “Very Poor.”
“We spend too much time cleaning data,” said one respondent. “Poor quality data comes from the evolution of the organization and a lack of consistent data management over time. The main challenges are time and money to fix the root cause.”
Simply put, there is still a lot of room for improvement when it comes to data quality in supply chain management.
There will be lots of talk about collaboration, but not much “walking the talk”
The problem is that many companies still confuse cooperation with collaboration.
In an April 2015 Harvard Business Review article — There’s a Difference Between Cooperation and Collaboration — Ron Ashkenas writes:
The odd thing about these examples (and countless others) is that the managers in these companies had been through various kinds of training about collaboration, teamwork, and the like. But despite all of this education, they were still unable to truly achieve the desired outcome because they confused pleasant, cooperative behavior with collaboration. In the insurance company [example referenced earlier in the article], the product developers kept the back office and customer service people informed, but they didn’t actively engage them in a joint effort. In the manufacturing firm [example cited earlier], the design ball was passed from function to function with the assumption that eventually all of the pieces would fit together — each believed the “overall solution” would be taken care of by someone else.
Having worked with hundreds of managers over the years, I’ve seen that very few admit to being poor collaborators, mostly because they mistake their cooperativeness for being collaborative. And indeed, most managers are cooperative, friendly, and willing to share information — but what they lack is the ability and flexibility to align their goals and resources with others in real time.
Lack of trust between trading partners is another contributing factor, a lingering problem I wrote about six years ago in Collaborate? Sure, Except I Don’t Trust You.
Companies will continue to work in functional silos
Break down your supply chain functional silos!
This advice is not new. Analysts, consultants, and others have been telling companies to break down their supply chain functional silos for as long as I’ve been in the business, yet those silos still remain tall and strong at many companies.
Logistics, Manufacturing, Procurement, Sales and Marketing — these functional groups, for the most part, continue to operate independently from each other, each driven by their own objectives and metrics.
In a research study we conducted earlier this year, commissioned by BluJay Solutions (a Talking Logistics sponsor) and in partnership with the Council of Supply Chain Management Professionals, we asked supply chain practitioners, “What are the top three barriers to supply chain and logistics innovation at your company today?” The top two barriers were the same as in our 2018 study, but in reverse. “Siloed systems and/or processes” increased by 17% this year compared with 2018, while “Existing IT systems are outdated” decreased by 13%.
This suggests that companies are making some progress in modernizing their IT systems (despite the continued use of Excel spreadsheets), but breaking down the silos between their systems and processes is a growing challenge.
Achieving end-to-end supply chain visibility will remain an elusive goal.
Yes, we have made progress in this area thanks to the emergence of real-time freight visibility solutions, the rise of supply chain operating networks, and other advancements. However, as I discussed six years ago in Why Supply Chain Visibility Remains An Elusive Goal and also in The World’s Oldest Supply Chain Analyst Report, there are two main reasons why achieving true end-to-end supply chain visibility remains a challenge:
There is no silver bullet for supply chain visibility. As I’ve written before, despite all the buzz about supply chain visibility software, it’s a worthless investment if companies don’t also invest the time, money, and resources to see and walk their supply chain, from start to finish, with their own eyes and feet. Simply put, achieving true end-to-end supply chain visibility takes considerable more time, money, and resources than many companies are investing today.
It’s a moving target: Supply chain networks, technologies, regulations, business models, and competitors are continuously changing, and as a result, so are the rules for success. Simply put, just when you think you’ve made progress and have it all figured it out, the rug is pulled out from under you.
The scope of end-to-end supply chain visibility must go beyond the status of orders, shipments, and inventory — it must also include having timely, accurate, and complete visibility to labor, safety, environmental, and legal practices across the entire supply chain. When it comes to these aspects of supply chain visibility, the industry still has many blindspots. For related commentary, see Still Don’t Know How Many Slaves Are In Your Supply Chain? and GM Supplier Factory Explosion: Thoughts On Supply Chain Visibility And Responsibility.
“Change management” will remain the biggest obstacle to implementing new processes or technologies.
We humans are creatures of habit — both good ones and not-so-good ones. And we abhor change.
In his book The Power of Habit: Why We Do What We Do in Life and Business, Charles Duhigg writes:
“So here’s the thing to recognize about your bad habit. You cannot eradicate your bad habit. If you just try and say, ‘I’m going to use willpower to make this behavior go away,’ it’s not going to work. And we know this from study after study. Every scientist who works on habits will tell you, once the neurology of that habit is set, it’s always there in some form or another.”
That’s the reason why breaking the Excel spreadsheet habit remains so difficult. And why for twenty years, whenever I have asked a supply chain or logistics practitioner about the biggest hurdle they had to overcome to implement a new process or technology, without hesitation they always say “change management.”
Industry analysts will continue to make predictions and be wrong most of the time
This goes for me (see I Will Be Wrong Again: Supply Chain and Logistics Predictions for 2017) and my friends at Gartner and every other analyst firm too. As for me, I continue to dust off my crystal ball, nonetheless, because coming up with predictions is a fun exercise for me and they usually generate some thoughtful ideas and conversations.
Which of these totally predictable predictions will definitely remain true in 2020?
We asked our Indago members and the two that came out on top were “Companies will continue to struggle with poor data quality” and “Change management will remain the biggest obstacle to implementing new processes or technologies” (52% of the respondents said both of those things “definitely will” stay the same in 2020, with another 42% saying they “probably will” stay the same).
What do you think? What other predictable predictions would you add to the list? Post a comment and share your perspective!