Marzena Reszka, lecturer, Staffordshire Business School
Everyone is talking about technology and how it can suit nearly everything. Wherever there is a problem, there is the promise of a technological solution, using some combination of artificial intelligence or machine learning, big data, automation, and the Internet of Things.
There’s no doubt that technology is set to have a big impact on every part of supply-chain operations, from planning to logistics. By focusing so much attention on digital solutions, however, companies may inadvertently be ensuring their failure. That’s because the technology-first approach ignores an inconvenient truth: the intensely human nature of the supply chain.
Technological optimists paint a bold picture of supply chains that are so highly digitized that the function itself disappears. They envision a world in which forecasting, planning, and execution are fully automated and seamlessly integrated, where systems adapt to solve problems and respond to changes in supply or demand without human intervention. Can this be achieved? In the future such supply chains might eventually become a reality, but today’s digital solutions must be integrated into today’s supply chains which can be a challenge.
Today’s supply chains are wrestling with the same problems they have faced for decades: poor visibility, uncertainty, mistrust among functions and stakeholders, biased behaviours, misaligned incentives, and slow decision making. Can technology fix that?
Problems like these won’t be solved by algorithms. Worse, left unaddressed, they could destroy much of the potential value of other digital solutions. The most sophisticated demand forecasting system is of little use if commercial teams and production planners ignore its outputs. And the value chain may be impacted.
Recognizing the critical role of people doesn’t invalidate the use of supply chain technology.
However, technology for sure may support supply chain operations. It can provide more data, and new insights from existing data. It can automate previously manual tasks, such as with electronic order-taking or robotic warehouse automation. And may help organisations address the human problems, by enabling greater trust, better communication, and enhanced collaboration across the organization. But we are far away from the dream.
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Holmström, J. (2019). The digitalization of operations and supply chain management: Theoretical and methodological implications. Journal of operations management. https://doi-org.ezproxy.staffs.ac.uk/10.1002/joom.1073
LaBombard, M.; McArthur, S.; Sankur, A.; Shah, K.; (2019). The Human side of digital supply chains. https://www.mckinsey.com/business-functions/operations/our-insights/the-human-side-of-digital-supply-chains
Price, Ch. (2018). How can technology improve supply chain management? https://www.telegraph.co.uk/business/intelligent-business/supply-chain-management/