On Demand News: 10/28/20
DW Morgan Company Supply Chain News--Don't confuse the tools like technology with true transformation.
Twisted Up Over Technology
Don't confuse tech tools with true transformation.
It seems simple enough that folks would not confuse the two: Supply chain transformation is a goal, an outcome, a value. Technology is a means—only one among many, by the way—to help reach the goal.
A recent Wall Street Journal story (tiered subscription model) reminded us again to mind the distinction, even though we’re in the business of supply chain transformation. The overall piece is about trade wars and how Chinese suppliers are undercutting the U.S. twist-tie market. That's not what caught our eye, though.
When was the last time you thought about twist ties as transformational?
A single Minnesota company called Bedford Industries invented the modern plastic-sheathed wire closure strips way back in 1966. Back then, you could have called it a tech startup, since Bedford’s innovation was figuring out how to improve on existing paper-and-wire ties, making them sturdier and better able to survive automated packaging machines.
From that beginning, Bedford still dominates the market today. To take just one example, nearly all of America’s 3.7 billion loaves of bread are shipped with Bedford products sealing the bag. They're the leading supplier of bendable and stretchable packaging components. Who knew?
Yet, if you were trying to solve a supply chain provenance problem, recent stories and industry case studies would have you believe the answer is blockchain. With that kind of digital ledger implemented by all you and all your suppliers, your team might be able to trace a listeria-tainted bunch of spinach through several tiers of resellers to the very farm where the contaminated veggie grew.
Or, you could just use twist ties.
That’s because Bedford had the insight to offer them printed with URLs or barcodes tied to the farm where the produce was picked. Just guessing, but the twist-tie solution probably costs several orders of magnitude less to deploy—and it’s a lot more likely to be adopted by those suppliers way back at the ends of the supply chain in Mexico or Peru or wherever your spinach springs from the earth.
Don’t get us wrong: We love technology, including blockchain. It’s a key tool that we use within our ChronosCloud supply chain automation platform, along with other high-tech means like Internet of Things devices, mobile apps, integration APIs, etc.
It’s just that when we see clients go wrong in their quest for transformation data, it’s frequently because they started with the technology instead of working from a desired outcome towards the best solution.
If you’re ready to map out meaningful supply chain changes, feel free to contact us. We can supply the expertise to help you identify, analyze and prioritize your opportunities—while making sure you don’t get yourself twisted up along the way.
Heard On The Dock
“You don’t think of ‘twist-tie’ and ‘technology,’ but the fact is [Bedford] products have growers putting a URL, on a tie, around a head of lettuce. Their solutions allow someone to say ‘Oh, this is where this lettuce came from.’ ”
--John Toner, President, United Fresh Produce Association,
quoted in the Wall Street Journal, 10/11/2020
While You Were Shipping…
More Recent Stories You May Have Missed That Caught Our Eye
When Visibility Isn’t About Visibility. (Supply Chain Dive) For those tired of hype about supply chain visibility, here’s a look at the WHY behind the technology. Turns out, visibility is often not a goal in itself but an enabling capability for other transformations (as we point out in our feature story above).
According to a recent Bain report, the conversation really should be about priorities like inventory management, demand management and flexible operations. Sounds like a to-do list for 2020 to us.
The report also points out that best solutions aren’t always the state-of-the-art ones that draw press coverage. “It could be as simple as ‘We’re going to make sure we get advance ship notices more reliably from suppliers for every truck that comes.’ It could be as advanced as ‘We’re going to start putting RFID tags on everything,’ ” said Mikey Vu, the Bain report author.
Vu also notes that transformation comes as much from connection as it does from new data. “Often you have all the data you need,” he said. “You just haven’t connected it in a way across both management systems and across functions, which actually gives you real insight.”
Driver Shortages Again? (Commercial Carrier Journal) It seems incredible that over-the-road truckers are starting to experience driver shortages of the kind that occurred in the then-booming 2018 economy. Because, well, 2020.
Yet, a different combination of factors are beginning to add up to the same answer. This time, closed or reduced-capacity driving schools are bringing fewer new drivers to the market. At the same time, nearly 25,000 drivers left the industry this year after the Federal Motor Carrier Safety Administration's Drug and Alcohol Clearinghouse database went live and its use became mandatory.
Add in a few other issues, and American Trucking Associations Chief Economist Bob Costello expects the net result to be reduced capacity and potentially higher prices that don’t resolve quickly. “The driver shortage is going to remain for a while,” he said. “It’s like 2018 all over again.”