Another week another company raises $115 Million for their Swedish electric-self-driving-cargo-car-looking-thing, so the big question is - when will your company buy one of these super sleek toys?
Here's a truth that's most likely known but can't be said: companies won't buy electric trucks until it makes a manager - or a whole company - look good. Sure, there'll be some companies that invest for altruistic reasons but that's not the majority of people - who have limited capital available - and logistics is a capital intensive game.
Because as fascinating and full of potential, big ideas like autonomous drones, hydrogen ships, electric trucks, or self-flying Cessna's can be, each in its own right, is a complicated and expensive system.
The truth is that implementing something simple is hard enough, let alone a complicated system, that you don’t fully understand or have control of. This expectation of failure can be corroborated by anyone who has gone through a "digital transformation” project, i.e. most people who have worked in a medium or large company.
The real question here is – does my company understand enough about how the operations are put together to be able to integrate an electric-autonomous-truck-like technology? (You don’t have to say it, I completely understand, the unsubscribe button is right at the bottom).
To answer this, we need to get on the same page about what logistics systems are. Luckily I happen to have spent the last ten years trying to figure this stuff out. So, here is my crash course in Logistics Systems and All the Important Things You Need to Know (can I use that as a book title?).
Thing 1: The point of logistics.
Is to deliver the product to the customer. It's the experience you craft for your customer when you're (literally) delivering on whatever promise the marketing department has come up with.
Thing 2: Logistics is a system.
When you do a project. There are a series of steps that happen in a roughly organized sequence to complete that project. In logistics, you have a series of steps that repeat themselves usually documented as processes, Standard Operating Procedures, Manuals. If the steps are not documented, then there's always a Greg around that's got you covered by saying stuff like “that’s the way we do it” or “that’s how we’ve always done it” or "shut up stop asking so many questions Krystian". In any case, these are the makings of your logistics system (the steps which get repeated).
Thing 3: Logistics is like a chair.
A chair can be used by you, but it can also be used by many others. Your logistics system, like a chair, is meant to be operated by many people.
Thing 4: The trick to understanding your logistics.
Most logistical operations can be dismissed as a confusing cocktail of chaos and complexity. The trick to understanding how your logistics is to pull your operations apart – one process at a time – understanding it and then moving on to the next. The realisation here is that logistics and supply chain are a whole heap of simple steps, all working together. The 'pull it apart' approach makes the whole thing a lot less intimidating.
Thing 5: Why is any of this important?
Once you understand that your logistics is a system. When you go out and buy an autonomous truck, you can go knowing that you are buying a new series of steps that add to your existing series of steps. Meaning that you can quickly work out if this shiny new toy is actually going to help you deliver for your customer (remember Thing 1) or if it's going to help you get closer to bankruptcy.
Thing 6: Why implementations fail.
Did you know that according to this study, 70% of implementations fail? (I was sure the number would be higher). There are many reasons for these failures we’ve already mentioned two of them: buying shiny things for the wrong reason and not understanding how the thing being bought actually works. The third, and in my view biggest, reason that implementations of new ideas in business fail - is that there is a mismatch of people.
To keep things simple, let's ask the following question. When you buy a shiny new self-driving truck, who do you call when it inevitably throws up a Swedish error message that you've never seen before?
As high-tech as things become, people still want to talk to people and if you take nothing else away from any of this blog-email, take this, when you buy a system, you buy a relationship with the people who run it. From managers to IT staff to technicians, to your own front line team. People are the ones that will use this new tool, operate the additional steps, and work to fix it when something (inevitably) falls over.
This sounds obvious and overly simple but I’m telling you from firsthand experience that in all the time I've spent buying, modifying, or building systems, people were the biggest contributor to success or failure. If you have a good team, you can turn even a piece-of-crap system into something.
I want to add a point here: if having the wrong team makes your implementations fail, people not using your solution is what kills the system in the long run. Because you only have a small window of time to prove that the thing, which has been hyped up as the means to make life better (and isn’t an active push to reduce headcount), actually does so. If you don't present value to your users quickly, and you mess up this part, you might as well run around naked screaming anything you want - because nobody is paying attention. Once you pass that window, it's game over (in most cases) ... but hey, at least you're keeping the consulting industry alive (who make money by addressing literally everything that has just been said).
How many systems am I dealing with?
Any business, from BHP to a corner milk bar (I’m fairly sure those still exist). Will have multiple systems, from ERPs to WMSs to self-driving trains to Xero and MS Office. Each is a system. There are a lot of them to manage.
Should I never buy anything new thing because everything will break, and everyone will hate me?
I hope that these realities are not discouraging. In fact, I hope to have the opposite effect because by pointing out the screw-ups, you are now more equipped to not fail.
This has been a rapid-fire and very brief look at logistics and systems and screw-ups. There is a lot more that can be covered. It’s not a complete answer to "what you don’t know" but now you know a little bit more. Next time we can go after building versus buying a system or maybe the saltiest topic of all: why people hire consultants.
[This was originally sent to my logistics email newsletter]