Have you ever received advice from a well-meaning supply chain “expert” about delaying technology investments? They may have said things like, “just use Excel, it’s fine for now,” or “investing in IT personnel isn’t really necessary at this stage.”
Conventional wisdom has long advocated for businesses to delay investments in complex software solutions until they reach a certain level of maturity. But while you may have been able to manage operations with Excel spreadsheets in the past, the growing complexity of modern supply chains and fluid demands of stakeholders necessitate early technology investments.
Any advice to the contrary isn’t just outdated — it jeopardizes the success of your business.
Solutions like warehouse management systems (WMS), enterprise resource planning (ERP) systems and transportation management systems (TMS) increase visibility throughout the value chain and boost efficiency by improving business processes. But you can’t wait for sophisticated reporting and tracking capabilities across various geographies to implement these mission-critical systems.
You have to budget for them from Day 1.
4 ways supply chain management has evolved in the last decade
Evolving expectations and advancements in artificial intelligence (AI) and machine learning (ML) technologies have transformed the way we manage modern supply chains. As a result, logistics management systems have become critical in maintaining efficiency and agility in your operations.
To reap the benefits and scale your business effectively, invest in these systems during the formative years of your business. Here’s why:
- Manual processes are costly. Inflation and the rising cost of labor have made manual tasks increasingly expensive. For example, manually generating a first-in-first-out (FIFO) product report with two forklift operators who earn $28.50 per hour might take three hours, totaling $171. But with the use of a filter feature, you can complete the same task in 30 seconds at a marginal cost of zero. The cost of manual processes adds up over time, underscoring the importance of process automation in the nascent phase of your business.
- Real-time information is non-negotiable. Stakeholders along the supply chain require real-time information to support data-driven decision-making and minimize disruptions. For instance, if retailers lack advanced shipping notices via electronic data interchange, they may experience delays in inventory management that result in stock outs or overstock situations. Or if a freight company doesn't receive a digital confirmation for a dock booking appointment, they may experience operational inefficiencies or scheduling conflicts. Investments in systems and integrations that support the real-time flow of information is the key to keeping pace with these expectations.
- Scaling demands technology. Whether you’re navigating a high-growth environment or striving to meet ambitious business goals, your ability to operate in hyper-growth mode is table stakes. When the business experiences rapid growth, doubling or even tripling in size every 12-18 months, you need tools that support informed decision-making. Relying solely on tools like Excel and clipboards hinders efficiency, but it’s not feasible to interrupt operations during a period of growth to install a new system. By investing in software solutions in the nascent stage of your business, you can adapt alongside the robust systems you’ve put in place and avoid playing catch-up.
- Training enhances productivity. Hiring frontline personnel like forklift operators and line supervisors with experience in WMS or ERP solutions can be difficult and time-consuming. But there’s good news: Investing in employee training actually delivers a significant payoff. Cultivating system proficiency among your team often translates into improved accuracy, speed, troubleshooting abilities and ultimately profit margins. And when implementing comprehensive training programs during the formative years of your enterprise, teams can navigate the learning curve before you reach a growth stage.
Embrace technology to drive business growth
Innovative software solutions have firmly established their place in the supply chain and logistics world. The days of launching and managing a business without state-of-the-art systems are over.
If you resist this change, your ability to thrive in a modern supply chain ecosystem will suffer. Technology investments are vital not only for survival but also for achieving sustainable, profitable growth. To stay competitive, embrace technology with curiosity and patience, creating a culture of continuous improvement and adaptability.
