Laying the Foundation of Digital and AI in the world of Logistics - A Leaders Guide - Part I

Was the year 2023 swept by one concept - it would have to be generative AI (gen AI). It has created quite a roar which has not been matched by any other technology in many many years. The speed at which it is being lapped up has been amazing and it billed to create the maximum impact in businesses . It is in the headlines almost on a daily basis. While it is yet to deliver results and has alarm bells attached to it however it is expected to create an overpowering influence in our work and lives in times to come.

This feverishness around gen AI can also become a big disturbance for leaders in respect of their core business imperatives and the importance of digitally recasting their companies. It might be therefore be prudent for leaders in the world of logistics to step back and look at the underlying foundations that might not be dominating the headlines but are vital for them to build their business digitally. They need to focus on creating a shift wherein digital is not just an enabler but the core value around which business is to function, architecting their digital products to make them scalable and robust , think about their a workforce where everyone has their own Gen-AI companions etc. It is critical to keep a tight focus on value, couple digital to business fundamentals by focusing on the foundations that can be often overlooked under the stresses of day-to-day grind and news cycle of technology hype.

Let is look at these foundations one by one

1. Build Digital Driven Value and the Builders

The most important focus for business leaders is how well they can use that software to build things, from businesses to digital products. The cost of building new digital product / services will continue to reduce , democratising the process ( creating more builders ) and making the build process faster. One would need to learn to build fast , test, and adapt quickly to create and deliver value.

New Revenues need to be generated from products that are not yet in the market. Revenue generation from just improving productivity would not be enough to drive competitive advantage.

As costs to build continues to fall these new revenue generation opportunities would become even more difficult. to harness

Building new products in businesses using digital means is the one strategic action that would have the maximum implication on growth ( e.g. Transportation capacity forecasting to align carriers and shippers capacity in the network to reduce costs and improve capacity assurance or assisting shippers to align their S&OP process with transportation capacity procurement )

Focus on the two most important elements of building

Build a new digital product, service , solution, or business that matters to your customer and generates new revenue for you and creates a competitive advantage

Build a team with the right incentives, tools and governance to build these new products, solutions or services.

Lack of ideas will not fail you but lacking execution to build can fail you

Do reflect on

1. Are you building a digital culture where people have the opportunity and incentives to create and innovate?
2. What are new revenue generator products being build in the coming year that also gives you the competitive edge ?
3. What is the ratio of your products / services are digitally enabled vs digitally driven and how do to plan to move this ratio in favour of the digital driven model. Digitally enabled refers to the use of digital tools to support and improve existing business processes. Digitally driven refers to the use of data to make decisions.