The changing approaches to technology in logistics

For any business to endure and develop, it needs to attract the most talented staff. The logistics and supply chain management sector is no different. The means by which employees contribute to the business are obviously varied according to skill set, but increasingly this is done through the use of information technology.

Technology has been used in the industry for a long time. Indeed in some respects logistics has exploited electronic communications for a longer period of time than almost any other industry. This is because shipping and trade depended on fast, accurate communications. The banks of telex machines evident in almost every shipping line, liner agency and forwarding office were commonplace, almost from the point the technology was commercially available. Similarly the airline industry was built on the availability of fast (for the time) communications links. 

This also applied to the adoption of computers back in the mid 1970’s. Computer systems excelled at the automation and production of documentation, which was an essential ingredient that underpinned freight transport back then. Most small freight forwarders used manual typewriters to prepare the relevant forms, bills of lading, etc. and ingenious tools were devised to support the duplication of the multiple forms from a single typed master document. As computers became available at reasonable cost to a business (keep in mind this was before PC’s were invented) having a machine that could produce all of the documentation required at the press of a button was astonishing. 

As the software driving these systems became more sophisticated, they evolved from being very fast document production tools into powerful information resources that could capture information, store it and produce reports and analysis about the business on demand. This really transformed the industry and in many cases, led to improved profitability and customer service. If anyone under the age of 30 today were to find themselves in a typical office from back then, they would be shocked how rudimentary everything was. The absence of any Internet connectivity, or portable telephones (let alone smartphones) would be completely disorientating. When confronted by a computer terminal with clunky green text characters on a black screen, enforcing the user to enter only a limited number of responses to the commands, they would lose interest very quickly.

The point of this stroll through the history of technology in the logistics sector is to highlight the point that we are in the early stages of a similar transformation.

A couple of weeks ago, a short essay was published by Tim Bajarin – a technology writer in the US, who eloquently made the point that the generation of young people beginning to enter the workforce have a very different appreciation of technology and information sharing.

This generation, usually referred to as ‘millennials’, use technology, essentially mobile devices, as the primary means of gathering information and interacting and sharing with each other. To them, collaboration is fundamental. This will be incredibly useful in the supply chain management game, as communication and collaboration across and between companies and trading partners is a necessity. The problem is, many companies, especially large companies, have a very limited appreciation for what this means for them.

Any organisation that is large enough to have a dedicated information services division will be challenged. These functions have usually been developed over a period of years and have to manage a variety of systems, data stores, communications infrastructure and software applications, along with a large population of PC’s, printers, mobile phones and tablets. They have to determine and then monitor security policies, interface to partner systems and in some cases community information services that provide links to transportation services and government agencies such as Customs and Tax. While doing this, they also have to deal with a large number of requests from users demanding changes to applications, links to other systems (which usually require the development of additional interfaces), along with enhanced analytical tools to mine corporate data stores amongst others. 

Indeed, the most disruptive and feared request usually comes from the Chief Executives office, asking for the latest mobile device, with full access to any and all corporate information services; and it must be available by the end of the week.

Therefore, is it any surprise that IT Directors usually look stressed?

So if we contrast the technology landscape I have just described, with the average user experience of a young person fresh from school or university, it is illuminating. They carry a powerful supercomputer with them at all times, they are always connected to the Internet, able to access unimaginable amounts of information and although they may not make many phone calls, are constantly sharing information with a huge number of friends via social network streams.

To them, information technology isn’t just a tool used at work, it is how they live.

Trying to get them to understand the technical limitations of the average corporate information system, let alone the commercial boundaries defined by custom and practice in the industry, will be a challenge. Attempting to do this in the expectation that it will retain their interest over the medium to long term, borders on foolish.

I believe companies need to consider harnessing the traits young people have that are valuable, e.g. rapid assimilation of huge amounts of information, collaboration and sharing and, surprisingly, a keen appreciation for privacy and morality, with a clear message about the boundaries within which companies have to operate. Those boundaries being defined by commercial realities and a legislative framework that is at least a century out of date.

The information services function in many organisations will also have to adapt and the first step may be to recognise that the existing structures are unsustainable and an increasing liability. This will not be easy and transitioning to where they need to be, will challenge every part of the organisation. In some respects, it may mean ceasing to invest in what is already there and developing a completely parallel capability, exploiting ‘technology as a cloud service’ from outside the organisation and accepting that applications are becoming lumps of functionality that exist on the Internet for the life of the operational need, paid for by the click. The one saving grace will be that the costs of doing so will be much lower and implementation will be much faster.