Can $100 million and a team of smart people be enough to realize “a future where global supply chains run as seamlessly as today’s most intuitive consumer technologies, optimizing real-time decision-making through AI and machine learning?”
That is Auger’s vision, the company launched by Dave Clark, the former Amazon Worldwide Consumer CEO.
“Global supply chains are broken — too many are still being run on Excel,” wrote Clark on a LinkedIn post this week. “Operators spend countless, frustrating hours battling endless spreadsheets stitched together from disjointed, outdated ‘Franken-software.’ It’s inefficient, chaotic, costly, sub optimal and completely unfit for the modern world.”
He then went on to announce Auger’s executive team, which Todd Bishop profiles in a GeekWire article. “There’s a common thread among many of Auger’s new executives,” Bishop writes. “Most of them have worked at Amazon, either recently or at some point in the past, in a variety of executive, operational, and technical leadership roles.”
In my 25+ years as an industry analyst, I’ve seen armies of smart people and billions of dollars invested to create that one silver bullet solution that will finally, finally solve all the waste and inefficiencies that exist in supply chain management.
Yet, here we are, still mired in waste and inefficiencies despite decades of technological advancements.
Why?
Because the real problem to be solved is not a technology one.
Yes, technology can continue to improve the way companies connect electronically with their trading partners, especially the small suppliers and logistics service providers at the long tail of their supply chains.
And technology can help alleviate the Achilles’ heel of supply chain management — that is, the “garbage in, garbage out” problem caused by poor data quality, an issue that still persists.
Technology can also enable faster and more sophisticated ways to analyze, optimize, and automate decision-making and workflows.
There is one thing, however, that technology can’t solve: getting companies to trust each other more and collaborate.
Heck, many companies still have trust issues internally between different functional groups. Logistics doesn’t trust Sales, and Sales doesn’t trust Manufacturing, and Manufacturing doesn’t trust Procurement…and they all continue to focus on their siloed functional metrics, which is what their performance reviews, paychecks, and bonuses depend on.
And when it comes to working with suppliers, customers, and logistics service providers, most companies still take a “What’s In It for Me?” approach to business relationships instead of a “What’s In It for We?” approach.
As Kate Vitasek and her research partners have highlighted in several books and articles on Vested business relationships, contracts and lawyers are not inherently bad; the problem is with the mindset and approach each side has traditionally taken. To quote from Kate’s book “Getting to We: Negotiating Agreements for Highly Collaborative Relationships”:
“The focus needs to be on developing evolving and mutually beneficial relationships that create shared value, solve mutual problems, and get both parties to a place of ‘we’ rather than the usual ‘us vs. them’ tug of war.”
Companies also confuse cooperation with collaboration. They’re not the same.
Simply put, many of the problems that persist in supply chain management boil down to a lack of trust between people, functional groups, and trading partners, and because every company continues to look out only for itself instead of taking a truly collaborative approach focused on creating shared value across their supply chain network.
I don’t know how to solve this trust and collaboration problem (although here’s one approach developed by Kate Vitasek and Karl Manrodt), but I know that technology alone won’t do it, no matter how much money and talented people work on it.
