Best Logistics Advice For 2014: Dump Tribal Knowledge
This time of year we, as business leaders, set our annual goals. Maybe you’ve already set some: to pay down capital debt, grow revenues or to finally iron out those kinks in your supply chain. No doubt, you want 2014 to be a banner year.
I’d like to offer some food for thought when it comes to evaluating and improving logistics in your enterprise: Whatever else you do in 2014, make it a priority to dump the tribal knowledge you might be using to make mission-critical decisions. Instead, substitute the facts. While this may seem contrarian, it is actually essential.
When you rely on real-time data versus institutional memory, you gain the benefit of what I like to call “command visibility.” The bottom line in today’s mobile-enabled, hyper-connected world: Companies that continue to rely on tribal knowledge and myths alone are falling further behind enterprises that are dealing in reality and actionable facts. A lack of command visibility is the common cause of logistics collapses we see in the headlines almost every day, whether it’s a failure to anticipate demand for the year’s hot new video game system or a supply chain breakdown caused by natural disaster.
Enterprises fail to plan ahead because they lack clear, readily accessible data on historical precedents. Or, they lack seamless communication up and down the supply chain and with key suppliers — the old right hand, left hand problem — and they are too slow to respond to market changes. Or, they invest in supply chain software that can’t be properly or fully implemented, which is the same as having no supply chain solution at all.
In any of those cases, enterprises are flying blind and have little choice but to fall back on “the way we’ve always done it.” We all know, few things can be more damaging to businesses than continuing to do something “the way we’ve always done it.” The time has come to dump “tribal knowledge.”
No matter your company’s mission or size, my advice is to resolve in 2014 to work toward the visibility that delivers a true competitive advantage in the form of a smooth, responsive and reliable supply chain. Here are four things to aim for as you adopt logistics solutions that deliver ROI and hold up under pressure:
1. Have constant connectivity. Even if your organization is not yet global in scope, chances are that your supply chain is. You most likely have key suppliers or manufacturers situated in various corners of the world, separated by time zones, oceans and different political circumstances. It’s critical that you adopt technology that can link all parties together to provide consistency and streamline processes in real time. Everyone in the supply chain — from the manufacturing plant in Asia, to the West Coast warehouse manager, to a delivery driver on his route in Des Moines — must be connected to accurate, real-time intelligence according to their specific needs. That means — and this is getting more important all the time — full mobile connectivity across platforms.
2. Choose a configurable solution. The market is crowded with supply chain management solutions you can force upon your organization. But tread carefully: The roadside is littered with companies that failed for lack of a solution that truly fit their needs. Many a high-dollar ERP implementation crashes and burns because configuration to a company’s business logic, business rules or established practices proves too difficult. The result is a big expenditure with little to no return on investment and a return to manual processes based on myth. The best approach is to find a solution that can be fully, easily configured to the needs of your supply chain without forcing you into a cookie-cutter shape.
3. Leverage relevant data for accurate planning. When the rubber meets the road, the key value of supply chain solutions is in their ability to help you make better-informed decisions. That’s true whether the business goal is to make your mobile enterprise more efficient, keep closer tabs on inventory management or to use every square foot of your warehouse. Culling more relevant, real-time data is the first step to planning for success. Mission-critical historical information — the history of transactions, product movement, procurements, inventory, supply and demand — is probably just sitting there waiting to help you make better decisions.
However, it may be locked up in mainframe databases you can’t easily access, or it’s scattered across several databases that don’t talk to one another. Or, worse, the information is still kept on paper. Smart organizations know that the key is in linking all that information together and making it transparent and user-friendly so it can be interpreted and applied in anticipation of the next spike in demand or supply chain interruption.
4. Replace manual processes with automation. Manual processes might have served you well in the past, but there are plenty of reasons it’s time to move on. Errors resulting from manual inventory counts often lead to over or under production, which can be financially disruptive. Manual processes also suck up a large amount of time and resources. On top of that, they’re tedious and slow, which can easily lead to errors and additional cost. It’s a vicious cycle that leaves enterprises with a lack of agility and permanently behind the trends of the marketplace. A system that centralizes information and helps automate the supply chain will provide a much higher level of support. It also offers real-time access to information that can help a business reach its maximum potential with minimum investment of time and planning.
If your company is among those still doing business the old way — “the way we’ve always done it” — it is probably killing your profit margins and your long-term business. Mobile technology now offers a way to find true ROI in the business intelligence you, most likely, already have on hand. Make it a priority in 2014 to start relying on it.