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WELCOME TO ACME BLOG AUTOMATION BOT 3.19
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There’s this kind of hidden-in-plain-sight idea about how technology makes our lives easier. You’ll find it touted as a all-in-one solution or key selling feature in all sorts of things — from home medical diagnostic equipment to recreational vehicles to project management software to toaster ovens. It comes in countless permutations and combinations, but at its heart, it goes a little something like this:
The more automatic something is, the more efficient it becomes.
If using a product is “so easy it’s on rails,” or “happens as if by magic,” or “comes with 625 instant push button toasting options,” then you know it must be good.
Most of the time, that’s a pretty safe argument for selling something, right? In an ideal world, decision-making should be smooth and hassle-free. If you can make objectively delicious toast without first having to master advanced wheat dough thermodynamics, that is undoubtedly a good thing.
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But as useful as automation is for many of life’s little processes, some decisions should absolutely not be automated. The stakes may be too high, the data set too nuanced, the variables just way too analog and contingent to be encapsulated in the absolute push-button simplicity of a pre-baked formula.
Welcome to this blog’s starting point. Next up: The bit where we segue to your supply chain.
It’s about balance
There is a place for automation in supply chain management. There’s no question that a great many supply chain processes can and should be placed on rails, whether organizationally or via management software.
In fact, IL2000’s transportation management system (TMS) is built to achieve exactly that. Using our TMS, you can instantly generate shipping quotes, compare carrier rates, or track shipments across multiple modalities. Processes that might have taken hours of process work or negotiation can happen instantly using this platform. Moreover, because they’re automated, they’re accurate and reliable.
But there’s a reason we don’t describe ourselves as a software-only company.
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There’s also a reason we don’t sell black box one-size-fits-all supply chain solutions. To be optimally efficient, supply chains require close and constant manual course correction. Invariably, at some point, a human has to recognize a challenge or an opportunity and then step into the fray — with every ounce of expertise and insight and discernment they can muster. So the point is, by all means, automate. Just don’t lose that all-important human touch in logistics.
Here are three common examples of how a supply chain might become a bit too fixed to automatic rails and how IL2000 can bring human expertise back into the equation.
1. Obfuscated decision-making algorithms
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The first depressingly common example of automation taken too far is software that automates carrier selection. Here you’re equipped with a blackbox solution built on the digital scaffolding of thousands of fixed shipping variables. All you have to do is tell the magic eight-ball management software what you have to ship and where you want it to go. It’ll buzz and boop into action and — with nary a decision point in sight — your shipment particulars will be stitched together from ones and zeroes.
All you have to do is watch (often in mute horror) as your shipment bumps and shudders wildly into motion. No thinking required.
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There are a few fundamental problems here, but let’s pick on two.
The first is visibility. Nothing in this picture lets you see what’s happening to your shipment if something doesn’t go to plan. The second is that the world isn’t a perfectly predictable and crystalline place. Variables change constantly. An electrical storm 1500 miles away might make trucking along one route untenable. Unexpected surges in demand for flatbeds might mean the carrier you used last week didn’t pick up the shipment and just isn’t answering the phone for you anymore. Or (as you can read about in this case study) the freight market may simply change, leaving your software a ticking chaos bomb, blasting out shockwaves of misguided decisions based on catastrophically defunct data.
How do you fix that? Well, an obvious key building block is a dynamic carrier selection process built on ever-evolving assumptions. Add to that a team of experts who’ll weigh in when they see a problem, temporarily redirecting your TMS to better solutions if necessary. Make all that happen and we’re getting somewhere.
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But we’re getting ahead of ourselves. We’ll circle back to that shortly.
2. Habit
We talk about this in great detail in our data white paper, but long story short, manager surveys consistently find that something like six in ten managers make important decisions based on a feeling even when reliable data is available. The feeling guiding that decision typically comes from one of two places: memory or gut instinct.
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Quickly, those reactive decisions cut deep grooves in organizational behavior. Suddenly that ad hoc decisions become entrenched as a habit. You may only ship using one kind of modality for a given shipping lane. You might exclusively choose Carrier X, even though Carriers Y and Z offer more competitive rates.
No one knows why. It’s just how it’s done. Moreover, these choices of habit become contagious, handed from decision-maker to decision-maker even though the starting point for that decision has long vanished from view.
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While habitual decision-making saves time in the short term, it rarely delivers as efficient an outcome as one based on hard data. Decisions based purely on memory are prone to the “flashbulb effect,” a tendency to incorrectly weigh the significance of unusual outcomes versus expected ones. Decisions based on gut feel can be influenced by any number of spurious influences, from a vague reasoning that it’s better the devil you know to not liking the colors a carrier uses on their website. Habits play a significant and ongoing role in entrenching suboptimal supply chain decisions.
The antidote to knee-jerk management? It’s got to have something to do with solid data and regular, rigorous freight auditing.
But more on that in a moment.
3. Momentum-induced tunnel vision
And then there’s just the human tendency to get caught up in planning for one thing while studiously ignoring everything else. The daily rhythm of supply chain management can be so resource-demanding and process-oriented that it’s easy to forget the importance of looking up. A company can just slip into a busy cadence of juggling inbound and outbound while keeping those shipments flowing smoothly and keeping a watchful eye on customer satisfaction.
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All of a sudden, you look up and an SEC ruling to report on supply chain carbon emissions is looming on the horizon. Or the trucking crisis threatens to unravel your supply chain from the highway up. Or tainted mystery meat sold at a market on the other side of the world brings the supply chain to its knees. Or a carrier may go bankrupt, leaving your shipments locked in logistics limbo and your profits in paperwork purgatory.
The solution? Well, it has to be some mechanism for rigorous quarterly business reviews where a team of experts looks at your supply chain and advises on important strategic decisions to future-proof your freight operation.
We’ll chat more about that in our momentous conclusion, up next…
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Systems that automate supply chain management are a vital part of the picture. They help you move fast when you can, and they reduce the bandwidth you need to invest to keep the operational aspects of your freight operation moving forward smoothly. But left unmanaged, pure automation can take your supply chain down the wrong path.
You also need the human touch. Things like:
- Accurate and insightful business intelligence: With seasoned supply chain analysts who know your industry and who can help you interpret the data to make on-point logistics decisions.
- Rigorous freight auditing: Where an actu al human analyzes your freight operation to spot errors and inefficiencies and work with you to fix them.
- TMS exceptions analysis: This allows you to make custom carrier decisions but also allows you to analyze those decisions later for their cost-effectiveness.
- Quarterly business reviews: When a team of supply chain experts work with you to identify your challenges and build clear, measurable, and achievable plans for solving them.
Talk to IL2000 about how we can deliver deeper efficiency to your supply chain.