Humans, The Missing Link (In Supply Chain)

The place to look for a problem, a gap, is where things break.

So what broke?

What made our supply chains so fragile?

The pandemic, with its devastating impact on manufacturing and transportation on the one hand, and exploding consumption as people compensated for being in lockdown, is a HUGE disruption.

It broke our systems down. So, where did it fail?

People are the only entity in the system that suddenly could not do what they did before—prevented from getting to work, prevented from travel. It explains production shortages and chaos in logistics.

It also unearthed a much deeper truth, a mostly ignored insight McKinsey proposed already in 2019, before the pandemic, supply chains are inherently human in their nature.

The pandemic demonstrated to us in non-deniable force that where we went all-in transactional and tried as much as we can to automate and hand over to technology, those places have the least resilience to withstand the violence of disruption.

The Ongoing COVID is a tsunami, granted, but small waves and ripples of similar nature constantly require our supply chains to adapt. Unfortunately, they find it difficult, time-consuming, and expensive.

Why? Because we forgot it’s all about humans, human interaction, and relationships. And that the role of technology is to facilitate, not to replace. Technology that is not way futuristic can drive efficiency when things go as planned but break down when the world gets in the way.

Technology hyper ball would like to paint a perfect world, but the reality is that for the foreseeable future, full automation is out of reach for most of us. So, for now, we need human intelligence to adapt. To make sense of changing circumstances. We need people to communicate reality with us – in a natural interpersonal way. We need back the dialogue we gave up for the cost efficiency of transactional relations.

Automation, it geared to solve an optimization challenge, and we tend to measure it primarily by cost and time dimensions. We, therefore, build systems that give us faster at a lower cost keeping quality levels acceptable.

We tried to eliminate the only non-controllable element in the system at the price of losing the ability to adapt to change, at least not in a timely, efficient way. But, unfortunately, we went too transactional and needed to compensate.

Some points for comparing transactions VS collaborative Key Characteristics of Partnerships and Transactional Relationships ?by Andrew Fearne

We are all comfortable with the notion that a sales representative will repeatedly call on clients, to enhance the relationship, to grow the revenue. We know we want account managers to have High EQ. We want the agents to develop a rapport with the buyer.

Why do we do that? Underneath the covers, we are trying to gain as much information about their thinking and address their needs as best we can. We want them to consider us as partners supporting them in their path, right?

Now reverse the roles. What is it you want from your supplier? Precisely the same thing. Insights into their thinking so you can offer them win-win collaborations. And you can achieve it in the same way you make your sales. To develop a relationship with your supplier, you can send agents with good EQ on top of their professional skillset.

Would you expect your automated system to do that? Not – that’s, as we said, way futuristic. So there is a gap.

Can I find a solution at a reasonable cost that will ride on top of the automation and mitigate?

For example, establish a connecting bridge at each external touchpoint of the system to bring skillset and EQ to my suppliers.

And if I am still struggling with my digital transformation, can they be implemented instead.

The reality for many is that you are lucky if you have a scanner seeing pallets when loaded to the container. For most, it’s a notification by the supplier telling you, and you never quite know if it’s accurate or wishful thinking.

Imagine you had someone coming over every Tuesday when they load the weekly container with your goods.

We can help with making that come true at a reasonable cost.

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