January 22, 2016
Column | fastlane

Are you fast enough?

When it comes to adopting new technology, moving slowly and cautiously is no longer an option.

By Clifford F. Lynch

Several months ago, I came across a Hewlett Packard Enterprise advertisement that opened with the following statements: "Tomorrow belongs to the fast. Winners and losers will be decided by how quickly they move from what they are now to what they need to become."

The ad was pitching technology, of course, but these phrases stuck with me. They reminded me of what we could have accomplished years ago if we'd been blessed with the technological resources we have today. It also reminded me of how slowly some of us move when implementing new ideas or processes. Much of this has to do with a lack of resources, particularly in smaller companies, but it's not uncommon for managers to face a multi-month approval process in larger corporations that have the necessary resources on hand or the funds to acquire them.

Right after the passage of the Motor Carrier Act of 1980, which deregulated the trucking industry, there was a rush to obtain operating authority that had been hard to come by before the new legislation took effect. While in this case, speed did not always spell success, today there are several very successful carriers that did not exist in 1979. They moved fast and won.

A review of supply chain history would yield other examples, but there are plenty more to be found in today's market. The obvious example is Amazon, the mega-retailer whose innovations in the product delivery arena have reshaped the industry. Its same-day deliveries, drones, truck fleets, and aircargo operations have caused many of us to sit up and take notice. Same-day deliveries, in particular, have disrupted the orderly, leisurely delivery systems that most retailers once maintained. Perhaps we're growing tired of reading about Amazon, but it moves fast, and to ignore it would be short sighted.

Uber moved fast and introduced a new concept for moving people from place to place. Uber's market cap has been estimated to be as much as $50 billion, and it now operates in over 70 cities around the world.

One segment of the industry that has sometimes had difficulty moving fast is the logistics service providers (LSPs). There are many smaller players in this segment that have excellent ideas but lack the resources to carry them out. That seems to be changing, however, as we see a continuing consolidation in the industry. As these firms combine to form larger entities, they gain the resources to move quickly, or at least quickly enough to outpace the competition. One word of caution about this industry: While the ability to move quickly may be advantageous to the larger entities, bigger is not always better. There will continue to be a niche for small but innovative LSPs.

For the users of supply chain services, it is critical to keep in mind that today's environment is all about technology. Businesses like Amazon and Uber would be nowhere without it. Not all supply chain managers are "fast" when it comes to developing technological expertise, but the successful ones will make sure they become proficient or surround themselves with those who are. In other words, their success will depend on "how quickly they can move from what they are to what they need to become."

About the Author

Clifford F. Lynch
Clifford F. Lynch is principal of C.F. Lynch & Associates, a provider of logistics management advisory services, and author of Logistics Outsourcing – A Management Guide and co-author of The Role of Transportation in the Supply Chain. He can be reached at cliff@cflynch.com.

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