CIO Insight: Start cleaning out your garage

   Over the first half of 2016 I’ve seen several of the biggest shippers in the world present at conferences on transformational supply chain technology initiatives across a range of activities.
   These tend to be companies with huge sourcing, logistics, transportation, and trade compliance demands. General Electric, HP, Unilever, Michelin. Massive complexity, huge scale, hundreds of carriers across multiple modes, dozens of production facilities and distribution centers.
   In other words, big IT projects.
   Their stories can inspire, but they can also make a shipper feel overwhelmed. How should a company that’s not so big and not so invested in supply chain technology get started down that road?
   The first step is to avoid the paralysis that comes with such big initiatives. If you hear about Johnson & Johnson’s efforts to attain global visibility to mitigate risk, the first inclination might be to say, “We don’t have a network that size, and we don’t have the investment available anyway, so there’s no rush.”
   It’s sort of like when it’s time to clean out the garage, and you don’t know where to start, so you leave it until the next weekend.
   Well, here’s the message I’ve taken from these big projects. Start somewhere. Don’t overthink things. Target quick technology wins that are high reward, low risk. Focus on what software vendors refer to as “time to value”—that is, the time it takes your organization to realize value from implementing a piece of technology.
   There are two rationales for this approach: first, a small technology project that succeeds (either through direct cost reductions or indirect benefits further down the chain) gives you currency. You can point to the success you’ve had implementing software X to tackle problem Y to get buy-in for bigger projects down the line.
   Second, it’s easier than ever these days to fail fast. That’s because modern software deployments (cloud-based, browser-based, subscription-based systems) are easier to implement, but also easier to disengage from, than the big, honking systems of the past.
   You can structure deals with software companies that enable you to test the waters quickly and decide if it’s a good fit. If it is, you can always augment that relationship with something bigger, and potentially something more entrenched.
   If it’s not, unplug and move on to another vendor, or another problem. I can’t stress this enough—there is a software solution or logistics company with technology behind it for almost any problem. Finding the right match isn’t always easy, but the nature of modern software makes this trial-and-error process much less painful.
   If it seems like I use this space to blindly advocate for technology usage, that’s because it’s becoming increasingly apparent that standing still is falling behind. Every day your organization waits to introduce supply chain software is another day that other organizations are doing so.
   Let me be clear. There were 2,000-plus attendees at Gartner’s Supply Chain Executive Conference in Phoenix in mid-May, and a lot of those attendees were shippers. More than I ever remember seeing before. Factor in all the shippers I see at the various software user conferences, and it’s clear that technology is being conspicuously consumed.
   So how should you start? Here’s a good test: ask yourself, what are your supply chain pain points?
     • Is it that you don’t know where your cargo is and spend too much time trying to manage that with people? You might want to pilot a visibility system.
     • Are you struggling to leverage free trade agreements that you think might bring down your landed costs? Feel out the global trade management market.
     • Are you paying too much for freight? See if a transportation management system provider can estimate how much your costs might go down.
     • Want to benchmark your freight rates? There are technology-backed benchmarking options in almost every mode these days.
   This can be daunting, for sure. The sheer number of technology providers—many of whom claim to do anything and everything supply chain-related—makes it a confusing endeavor to understand where value can come from.
   So the first step (even before the pain-point exercise) should be to prioritize what part of the supply chain is most critical to the success of your company. It could be that access to ocean freight capacity is many times more important than a $200-per-FEU reduction in ocean freight rates. It might be that stock-outs are a bigger problem than inventory carrying costs.
   These issues can all bleed into one another, and many of the top supply chain software companies offer product suites that link all these functions. But if you’re struggling to understand the value of automating a single process, and having difficulty getting the budget to address that issue, start small.
   There’s always time to scale your technology usage once you know what you’re doing. Just know that inaction is not a prudent course. The world’s biggest shippers aren’t just using supply chain technology, they’re evolving through supply chain technology.