From time to time, Supply Chain Matters shares observations and brief narratives of the global supply chain management landscape from an admittedly witty or critical perspective. We termed this as our Just Sayin series, and the following is an August entry.
A Harvard Business Review article published in June, The Death of Supply Chain Management, has secured attention on social media channels. After reading this article, Supply Chain Matters was compelled to share our specific comments and counter viewpoint.
The core premise and conclusion of the authors are that new digital technologies have the potential to completely disrupt supply chain management. Noted is the following statement:
“Within 5-10 years, the supply chain function may be obsolete, replaced by a smoothly running, self-regulating utility that optimally manages end-to-end work flows and requires very little human intervention.”
Being a blog platform with a core perspective on supply chain management business process and information technology, we were taken aback by the directness of the above statement. In the article, or perhaps blog commentary, judging on the length of content, the authors point to a number of buzzword technologies including Blockchain, Internet-of-Things, Advanced Analytics, and supply chain digital control towers. This conclusion is bluntly expressed as follows:
“The trend is clear: Technology is replacing people in supply chain management- and doing a better job. It’s not hard to imagine a future in which automated processes, data governance, advanced analytics, sensors, robotics, artificial intelligence, and a continual learning loop will minimize the need for humans. But when planning, purchasing, manufacturing, order fulfillment, and logistics are largely automated, what’s left for supply chain professionals?”
We could not disagree more.
There will always be a need for humans managing and controlling supply chain management processes. The difference is that technology will take on a prominent role in assisting with more-informed and real-time information and context.
From our lens, the authors represent a viewpoint from advanced technology circles that IT automation is the end-game. No need to have to deal with people management needs or person-to-person communications since machines can automatically manage processes and decision-making. There is little consideration nor sensitivity with what the end-state implies. Will machines negotiate key supplier agreements? When an unplanned disruption or new business opportunity surfaces, will machines be able to lead and direct ad-hoc work teams to resolve such events? When a natural disaster, major supply chain glitch, or unplanned inventory surge occurs, are machines going to be able to muster and direct needed people resources and human ingenuity to resolve difficult problems?
Reviewing the biographies of the authors, we note that one was Amazon’s VP of European operations for over 12 years. This blog has continually highlighted the tense and confrontational labor relations and work stoppages that Amazon Europe has encountered within its core customer fulfillment centers in that region. That included annual fulfillment center work stoppages at the height of the Black Friday shopping weekend. One is an Associate Director at the Boston Consulting Group, primarily with an academic background, and perhaps not attuned to day-to-day management of complex and dynamic organizations. One, whose biography is not stated, is according to Linked-In, a Senior Partner and Managing Director in the London office of The Boston Consulting Group with most stated experience stemming from management consulting.
BCG always seems to want to own or dictate the vision of future business direction, but the end-state expressed in the HBR commentary is by our lens, shallow, blunt, and not supported by solid logic. What scale of advanced technology is required to be able to meet such and end-state, and what is the total cost of such technology over the 5 to 10-year horizon? Does that cost surpass that of the current labor costs?
We would be further remiss to not mention that if all consumer or retail focused companies were to shed the majority of their people resources, who is going to be able to buy all of their products?
A final observation reflects on HBR itself, and its editorial quality. Posting Guidelines indicate that conversations (content): “will be energetic, constructive, and thought-provoking.” Our observation is that such content should be of high quality and should further represent a balanced perspective on the specific topic. Pitching technology buzzwords or business viewpoints without concrete examples or quantified, balanced data should be beneath the editorial standards of HBR.
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