Long term Supply Chain Transformation starts with simple Steps

Anyone paying attention to the supply chain world is likely to be either overwhelmed or bored by the endless discussions of digitization. Yet to avoid talk about such developments would be like farmers not paying attention to the weather. Logistics is undergoing a monumental technological change and companies that are able to transform their supply chain will gain huge advantages in customer service, flexibility, and efficiency and those that don’t will struggle.

The trick to turning conversation about the weather into action is to reduce daunting long-term vision into small steps, focusing on what is achievable in the short, mid, and long-term.

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Take data quality and usage for example. Mention anything related to data in a room of supply chain experts, and it usually takes less than 5 minutes to get to a nervous discussion of big data, AI, or blockchain and the risks involved in being an early or late mover. Ultimately both the transformation that needs to occur and the costs of doing nothing are enormous, IBM estimates bad data quality costs $3.1 Trillion per year in the US alone.

A long-term data improvement strategy might look like the following. Steps 3 and 4 are what concern most supply chain leaders, but any company can start tackling step 1 and 2 today.

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This is because many data collection and quality problems are actually people or communication issues surrounding how you receive, create, and share information. Of course, there are certain technological or process limitations that ultimately must be overcome, but our experience shows that communication goes a long way.

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If a supply chain department receives a variety of spreadsheet formats from different business units, thereby causing hours of copying and pasting and reformatting, managing upstream may be beneficial. It sounds stupidly simple, but one might be able to solve the issue by scheduling a workshop with the relevant people and deciding on a uniform approach or creating a shared template.

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When a department struggles with inaccurate or inconsistent data, this can be improved through regular meetings to review the last 100 records/outputs with the team, and measure the improvement (hopefully not decline) in quality or re-work ratios over time. This method is also called the “Friday Afternoon Measurement” by Thomas Redman the  “Data Doc” and can help build a culture of high data standards. Along with this, clearly establishing department or company-wide standards for file type, currency, decimal type, dates, etc. can go a long way to reducing errors and time waste and does in turn also save expenses since cleanup activities are normally conducted by (expensive) third parties.

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Lastly, if the data a team or department shares causes work downstream one can proactively collaborate with counterparts on identifying more suitable formats and mediums for sharing. The Golden Rule applies here, if you’re annoyed by the data quality or lack of customer service you receive, at least make sure the people you send information to don’t feel the same. Of course, if a counterpart wants an API solution, the supply chain operations team might not be able to help right away, but something as simple as changing the date format could go a long way.

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Once progress in these areas has been made and data has been brought into a limited number of platforms (or even a single platform such as Logward) it will free-up more time and resources toward the subsequent steps including data-enrichment, cross-referencing, and automation. These become the basis, or common language, for more advanced problem-solving, causal and predictive analysis, and risk management. In other word the organization can move from asking ‘’what happened?’’ to ‘’why did it happen?’’, and consequently predicting ‘’what will happen in the future?’’

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Even if the benefits of such a process are clear, our experience with Logward shows that one of the biggest challenges is to change the mindset of the people that actually make logistics happen. Employees in any supply chain department are very committed to getting things done and working with a very small margin of error and under tight budgets. They are therefore naturally hesitant to implement new ways of doing things or take big leaps. Second, integration of any new technology almost inherently decrease efficiency in the immediate term. This is only logical, since stakeholders will have to use and understand new tools in their day-to-day job. It doesn’t help that if the new tool or system will exist next to the traditional system, we see that stakeholders tend to not (fully) use the benefits of the new system.

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While we like to think that a practical approach of taking “baby-steps” to prepare for the coming weather is widely applicable, at Logward we recognise the change management aspect that must be dealt with. Supply chain transformation does not only mean providing the technological means to improve a system, but also empowering the human intelligence and experience to best leverage it. Hence every day we put a tremendous amount of effort into gathering market feedback, optimising the UX of our software, and properly educating and onboarding new clients. This is why we don’t just “build software and move containers” but also “change mindsets.”

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Logward is a Hamburg & Bangalore based logistics technology company.

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We build software, move containers, and change mindsets.

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If you have any questions or just want to say hi, reach out to mail@logward.com. Or you can book time with one of our logistics experts here.

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