Far too many supply chain execs think small when they should think big
The majority of supply chains were designed for another era, according to Brittain Ladd, a consultant and former Amazon executive.
Reacting to an article by The Hill, which makes the argument that supply chains are being transformed, in a LinkedIn post, Ladd said: “They aren't being transformed. In fact, the majority of activity taking place globally related to supply chains is doing nothing more than making incremental improvements at best.”
He added: “Is increased supplier visibility, and increased visibility into suppliers suppliers, transformative? Not really. Is increased visibility into inbound shipments and inventory, transformative? Not really.”
The space has become flooded with software from startups all claiming to do something to improve the management and performance of supply chains, Ladd argued.
“I speak with partners from different consulting firms. I’m amazed at how many companies have purchased and installed software that generated little to no value across their supply chain,” Ladd wrote.
“The logistics and third-party industrial complex is now full of companies claiming that their integrated software provides "one view" of a customers supply chain.”
“These companies, Flexport, for example, use creative advertising to generate interest: "Accelerate performance and growth for your entire supply chain. Ship to and from anywhere. Track everything. Collaborate with everyone. See what happens when data drives decisions."
“Flexport has a good foundation but when Dave Clark becomes CEO, I anticipate he will make major changes across the company.”
Not only are the majority of supply chains designed for another era, but, even worse, the thinking from executives and consultants is also maintaining the status quo, not driving innovation.
“Stated another way, far too many people are thinking small when they should be thinking big,” Ladd commented.
“For example, I'm convinced that Amazon, by 2025, will unveil a 100% autonomous cargo container ship.”
“If you think Amazon is big, wait until they become one of the largest 3PLs in the world generating an additional $60 billion to $100 billion to the bottom line by 2035.”
He continued: “There are too many supply chains. The sheer number is increasing complexity. Complexity is increasing costs and killing supply chain performance. If supply chains continue to operate independently, very little transformation will occur.”
Transformation will happen when executives rethink how they view their supply chains.
The best ones will consider new business models, collaborate across the supply chain with other companies, and be willing to disrupt their supply chains and their companies.
“Supply chains are changing but they aren’t yet being transformed. It will takes years of effort and disruption before the transformation happens,” Ladd concluded.
