You Must Solve the Supply Chain 4.0 Riddle
Keith LaBotz - August 05, 2021
We are the Technology Needed for Supply Chain Collaboration
Stop. You need to solve this riddle before going any further with Supply Chain 4.0:
How can your supply chain collaborate without collaboration?
Let me explain. A collaborative supply chain begins with collaboration between supply chain partners building the process. All those attractive features: end-to-end transparency, resilience, sustainability, predictive analytics - these don’t happen without systems integration, and that requires consensus on a technical specification.
Supply Chain 4.0 dangles the carrot of collaboration without providing this technical specification, leaving this crucial step to supply chains. Systems disintegration is promoted when there is no uniform standard which ironically, undermines collaboration. Supply chains have been struggling with this paradox for over thirty years, and something will need to change if we want that carrot.
Supply Chain Hamster Wheel
The obstacles to Supply Chain 4.0 are not new, and neither is the value proposition. If this seems vaguely familiar to you, that’s because it’s part of a cycle, and solving the riddle may allow us to finally break out of it.
Here’s how the cycle works. There’s a new plan for a brighter future. It begins with a great deal of buzz and high hopes, but the realization sinks in that the future looks nothing like the buzz. No problem. We’ve got better technology now, so here’s an even better plan. Let’s give it another try.
Things do improve, even though it can feel like we’re on a hamster wheel. As Gartner Research has outlined in their Hype Cycle model, technological innovation is an evolutionary process of failures, reboots, and reiterations. The lessons learned result in improvements that ultimately lead to broader adoption of technology.
We can expect Supply Chain 4.0 to follow the Hype Cycle and eventually recycle its unfulfilled promises in the next initiative packaged with new buzzwords. If this is true, then it suggests current technologies are the offspring of previous attempts at the same thing. Maybe we can find some clues about Supply Chain 4.0’s hidden past to help us solve the riddle.
Supply Chain 4.0 AKA Information Superhighway
Remember the information superhighway? Meet Supply Chain 4.0’s mother. Twenty-five years ago, the dot-com revolution had supply chains scrambling after the internet seemingly appeared overnight.
Like Supply Chain 4.0, it spawned too many buzzwords describing the same thing: World Wide Web, cyberspace, the Net, infobahn, information superhighway... A future vision of possibilities based on then-current technology spawned a barrage of new solutions that disrupted business. The paradigm shift was in full force until the speculative bubble burst.
I led a dot-com transportation exchange, EFX, at that time with a first-row seat to this Silicon Valley spectacle, and the same positives and negatives are at work in the current cycle. The good ideas generated from the dot-com revolution continue in Supply Chain 4.0. When a good idea becomes a bubble, the bursting bubble can be as traumatic to supply chains as a COVID pandemic. It’s a risk that’s always present and this is another way buzzwords can sting a supply chain.
Buzzwords inflate bubbles until the majority who follow without question realize their folly. The mania gives license to tunnel-vision, assumptions, exaggeration, poor planning, fear, greed, and too-big-to-fail overconfidence. This can also be part of the Hype Cycle and we can prevent this downside by accepting that our best efforts and hard-won plans could be misguided. What does the dot-com experience tell us about Supply Chain 4.0?
- Supply Chain 4.0 is attempting to fulfill many predictions from the dot-com revolution.
- Healthy, evidence-based business fundamentals should drive decisions rather than hype and self-serving agendas.
- Buzzwords influence outcomes; we should not discount their importance and use them appropriately.
- Technical standards encourage growth, and they are integral to networks. Supply Chain 4.0 does not have standards for the necessary integration.
It does not look like there’s anything here to help us solve the riddle, but it looks like the information superhighway succeeded thanks to technical standards.
We Limit Technology
Technology has advanced significantly since the dot-com revolution. However, the same cannot be said for us. We’re at Supply Chain 4.0, and there was no upgrade to Human 4.0, so maybe it’s worth considering where we need improvement.
We like to think we make decisions from rational analysis, but we often make an emotional decision and then invent a rational analysis to justify it. We’re still fighting the same problems that dogged supply chains thirty years ago, even though solutions have been available all along. Technology and resource constraints are not the only obstacles to the integration needed by Supply Chain 4.0. Could we be the obstacle to collaboration?
Progress requires initiative, and most prefer the comfort of the status quo. Collaborate with other companies on integration standards? Replace a process I helped create? Suggest improvements? Question authority? Challenge the status quo? We may need to change for Supply Chain 4.0 to move forward.
The Answer to the Riddle
How can your supply chain collaborate without collaboration?
I cannot solve the riddle but will share my thought process, and hopefully, it will help you solve it. Here’s my thinking. If we’re serious about Supply Chain 4.0, then it’s clear we’ll need to do things we have not done before. We’ll need to collaborate with the rest of our supply chain on priorities, technical specifications, timelines, and level of commitment to support Supply Chain 4.0.
- Plan and present the project for executive support and organize the team.
- Initiate the collaboration effort with all partners in our supply chain.
- Reach a consensus with all of our partners on priorities and technical specifications.
- Our partners will have to do the same with their supply chain partners. We’ll have to wait for the feedback that could undermine a consensus we’ve built with others, resulting in reiterations and multiple revisions.
- We might have to repeat the previous step with tertiary supply chains.
This will be a considerable effort, and we’re only scratching the surface. There are so many other issues we can address that are more manageable. It’s going to require serious commitment and prioritization.
We’ve done this before and Supply Chain 4.0 isn’t removing the obstacle to integration - our lack of collaborative planning. In the past, supply chain partners waited to see what others were doing before committing to an integration strategy. Has anything changed with Supply Chain 4.0?
Maybe someone else will come up with an integration standard for Supply Chain 4.0 and solve the problem. Heck, we’ve been trying to figure this thing out for thirty years. What’s one more year of waiting?
If you want to learn more get your Guide to Logistics 4.0
In this Guide you will learn:
Why a strategic process in transportation planning is a top priority for digitalization
What megatrends will increase supply chain volatility
How to manage it
- How Can Industry 4.0 IT Integration Be Achieved Smoothly?
- The Significance of Order Sequencing in Discrete Manufacturing
- How to improve your Supply Chain Management: The Power of Control Towers
- Optimizing Human Resource Scheduling in Manufacturing: A Technological Approach
- How to Lower Transport Costs With High Fuel Prices