It seems almost impossible to discuss supply chain management these days without mentioning technology and the advances in AI that can use immense processing horsepower and thus help “revolutionise the SCM supply chain management”.
Nevertheless, it is not about horsepower. Jay Leno used to say that horsepower only sells cars, but torque wins races. Care for a short lesson in mechanics here? Horse-power is about how fast a machine can perform work, but torque is the ability of that engine/mechanism to perform work. Higher torque ensures higher horsepower in lower RPMs.
So, it’s no use to have the technology to make something run fast if you don’t have the power to get it moving in the first place.
Supply Chain Management is Based on Relationships
The key pivots in any supply chain management system are the business leaders – the humans who make decisions. Technology cannot provide or mimic the final human judgment. It can make predictions and forecast costs, demands, or trends, but it does not substitute people, and we think this is one of the biggest things the post-pandemic world needs to understand.
At the end of the day, two humans shake hands, make connections, and get things moving. They do more than exchange data. They build relationships upon which every business exchange is based. From warehousing to financials and marketing, people build trust and relationships, and that’s what moves things forward.
Yes, you could have a machine gather and validate data for you. However, relationship data is more than a machine can pick. There is a certain kind of information available only to an individual physically present in the life cycle of a supplier. This is where people become invaluable to a long-term supply chain strategy.
If you have a man on the ground, who can help collect more personal data, assist in providing feedback, share expectations, oversee delivery parameters, and make sure you get what you pay your supplier for – well, that’s more valuable than an AI running analysis and forecasts.
This is the invisible business need most supply chains have – the connection with a local man. This is the weak link in a chain of supply that can go around the world.
But let’s take a closer look at the challenges out there. Perhaps this will help clarify why interpersonal relationships are crucial to a resilient and efficient supply chain.
So, AI is not the solution
AI is part of the solution, but not THE answer. The initial goal of a machine learning AI was to predict future events. It would gather and process information and give you a few mathematical possibilities. However, deciding which one to pursue still requires human judgement.
Moreover, gathering the data is not easy, and an AI cannot do it alone. It’s not that it doesn’t have the necessary horsepower. It’s just because it doesn’t have access, not like your local guy, going to check on your supplier every Tuesday, even having lunch with him, or jogging together in the park. That kind of information, and that kind of relationship – well, that’s not AI.
Even if you use complex software to assess risks and help make decisions, you still need to feed it data. You still need access to that data, and there you have it; only through interpersonal relationships, you can do that.
Nothing is Lost. Everything is Transformed
In logistics, the human factor is part of a “scientific discipline” concerned with the understanding of interactions among humans and other elements of a system, and the profession that applies theory, principles, data and methods to design to optimise human well-being and overall system performance” (Grosse, Calzavara, Glock& Sgarbossa, 2017). So, human behaviour and decision-making significantly affect logistics management and the SCM, if you ask us.
So, naturally, human work will continue to be essential and would not be substituted entirely by technology anytime soon. The reduction of people performing challenging tasks is counterbalanced by new roles that are crucial to the efficiency of the supply chain.
As they say, with everything in nature, nothing is lost; everything transforms. So do supply chain management roles.