Back to List

What is your perspective on technology?

In preparation for this article and the upcoming LQ Symposium on november 8, 2007, I’ve been asked to comment on what is referred to on the editorial calendar as “new frontiers in technology” — and, specifically, to consider the technological innovations that are driving supply chain processes. This is not exactly subject matter for an episode of Star Trek (I’m not expecting to use the space shuttle as a carrier any time soon) but is certainly critical to our industry’s bottom line.

I am reminded of an article that I wrote for the September 2004 issue of LQ. In it I adopted the role of “techno-realist” and (with the help of Wikipedia) shared the prevailing description of my chosen perspective. Restated, the techno-realist approach involves a continuous critical examination of how technology can help or hinder people in the struggle to improve the quality of their lives, their communities and their economic, social and political structures.

That’s the principle. So how are we doing in practice?

Three years later, the intense examination of technology continues. But before I can consider what’s new on the horizon, I have to reiterate what I wrote in my original article: Technology is a valuable, decisive tool. Information technology certainly enables great companies and outstanding individuals to reach higher standards. Ultimately, though, all that counts is what you do with the information you gather. More broadly stated, the most important aspect of technology is how you employ it.

It is my contention that, as an industry, we still aren’t using existing technology to our best advantage. I have a hard time discussing what is new, better or different when we haven’t fully realized the potential of what we already possess.

Now don’t get me wrong. I happen to like what technology can do. I’m just as dependent on my Blackberry and laptop as the next guy. What I take issue with is the attitude that it lies with the logistics suppliers to take full responsibility for implementing the latest technology and educating the customer as to its best use. We don’t operate in a vacuum. We employ as much technology as the customer will allow. And directly or indirectly we all share in the costs. Unfortunately we don’t all readily share in the cost cutting.

Let me explain. The perception is that all logistics suppliers have what they need by way of technology to do their jobs effectively. The reality is something different.

To illustrate my point let me discuss a basic logistical procedure that needs to be performed several times per carrier load, namely, updating status reports.

For the bulk of our business, we still perform updates manually. In my opinion too many worker hours are spent keying in updates in multiple databases each time a transaction takes place. Most of our carrier loads require ten updates, and someone keys in the changes as soon as they happen. The system is fraught with errors. Yet we all know the technology exists for updates to be dispersed automatically. It has existed for fifteen years. Only we can’t get our all our clients (or the 4PLs hired to manage their carrier bases) to discuss upgrading their systems to integrate the automatic updates. They consider it our problem and because it’s our problem they won’t invest the time or money necessary to upgrade.

Competition allows for the additional cost of manual updates to be built into the price of doing business. But let’s face it. This is a real cost representing a real waste. Waste that should be trimmed out of the system for everyone’s benefit. I can assure you, the customer doesn’t always care about implementing the latest technology. They are only interested in results. Transparency. Being able to access their own system to see what the current status of any particular shipment might be. But ironically, employing technology that permits automatic updates would ensure greater transparency at lower cost.

Certainly it is the logistics supplier who is driving the whole process. How the supply chain is managed has nothing to do with emerging technology, or even the available technology. It has everything to do with the specific technology that is being employed — or not employed, as the case may be. And that has everything to do with the customer’s willingness to buy into whatever technology-based value-added program the logistics supplier devises.

When you’re talking about spending money on technology it needs to be edited to ensure that the value proposition is there for the investment in technology. Using my example of manual updates versus automated updates, the technology is all in place to eliminate a great deal of waste. It’s not technology that’s the issue here, it’s the willingness to employ the appropriate technology.

So why don’t we? Is it a lack of technology? No.

Is it the lack of our desire or ability? No.

The answer lies with the customer. If the customer is unwilling to invest in technology that reduces the supplier’s cost, then the waste remains. It takes both parties’ full commitment and participation to trim the inefficiencies.

I readily advocate the appropriate use of technology. To this end, any discussion about technology needs to center around the effective employment of technology within the logistics industry. Who invests and to what extent? Are we doing the right thing for the good of everyone?

I still don’t have a solution for our aforementioned problem of updating reports automatically. Certainly the next phase of our operating system is to equip more drivers with both GPS and voiceless communication devices. geoFencing will facilitate real time updates immediately and avoid the requirement for manual intervention. Clearly the advancing technology is still way ahead of the customers’ willingness to share in the cost of its implementation.

You don’t have to be what the marketers refer to as an “early adopter” to get what technology can do for you. You just have to be open-minded enough to consider the possibilities and be willing to evaluate the return on investing in new technology. Go ahead. Consult with your logistics supplier on how best to justify the expense. You’ll win big in the long run.