Balancing Human Expertise and Technology in the Supply Chain
Technology continues to revolutionize the way that businesses manage their supply chains, enabling more efficiency and operational accuracy. Collecting vast quantities of data, optimizing networks and managing inventory are just a few of the tasks supply chain and logistics professionals are streamlining through automation.
But as the role of technology continues to evolve, where does human expertise fit into the equation? And how are supply chain professionals balancing digital solutions and human expertise in their operations today?
To answer these questions, we conducted the Tech + Humanity research study in 2019 to get a consensus on this perceived optimal balance among industry professionals.
According to shippers and carriers surveyed, the optimal balance in 2019 was 60% technology and 40% human expertise, indicating that our reliance on technology had surpassed that of traditional human capital across several supply chain tasks.
However, this finding didn’t tell the full story. The results instead indicated that supply chain professionals still place high importance and value on human support. The types of tasks are simply changing, as technology continues to streamline manual processes across supply chain operations.
Human support remains the best solution for tasks that require strategic thinking and decision making, such as issue resolution, negotiation, business planning and communicating with customers.
The findings from our 2019 study provided compelling insights about both human capital and technology, but most notably confirmed that optimal supply chain management requires a strategic balance of both technology and human expertise.
The COVID-19 pandemic drastically impacted the way that businesses operate. Supply chains needed to support new buying patterns and behaviors, as organizations adapted their strategies quickly to keep up with changing demand.
According to 850 global shippers and carriers surveyed for the 2021 Tech + Humanity research study, these dramatic shifts impacted how these professionals balance human support and technology within their operations in some interesting ways.
The findings revealed a counterintuitive shift toward human support, a surprising update given the new remote and largely virtual environment that we’re in today. Supply chain professionals indicated that their new ideal balance was 57% technology and 43% human expertise.
This seemingly small 3% shift towards human capital might seem insignificant, but is noteworthy considering the long-standing emphasis put on digital innovation within the industry, and the tremendous technological advancements we’ve seen over the past several years.
The already complex and fragmented global supply chain experienced new levels of volatility due to COVID-19. These operations became a key topic in boardroom conversations, shifting from a budget line item to a key component of business strategy.
During times of extreme volatility, human expertise and ingenuity are best positioned to address and adapt strategies based on changes in the market. That proved to be especially critical during the pandemic. Industry professionals had to step up to make high-impact decisions on behalf of their organizations, and found human capital best positioned to help provide this support.
Key tasks shifting toward human expertise compared with 2019 included:
- Managing inventory, + 12.5%
- Obtaining quotes/pricing, + 9.5%
- Loan scheduling, + 7.5%
- Booking carriers, +6.5
- Monitoring shipments, + 6%
This increased desire for human support in response to the pandemic was made evident by the changes within these fundamental tasks since 2019. However, technology is increasingly the optimal choice for tasks focused on data collection, reporting and operational accuracy.
Tasks moving towards technology compared with 2019 included:
- Analysis and distillation of data into usable takeaways, + 10%
- Optimizing the carrier network, + 8%
- Identify operational inefficiency, + 7.5%
The COVID-19 pandemic increased the pace of digital adoption throughout the logistics industry at a rate never thought possible. Yet, despite significant digital advancements, we found that shippers and carriers are craving more human expertise in their supply chain operations than just two years ago.
While our 2021 Tech + Humanity study unveiled a clear desire for more human support across key supply chain tasks due to COVID-19, effective operations still require a strategic balance of both human expertise and digital solutions.
The role of the human side of the equation will continue to evolve, but it will never be replaced entirely by technology.
Digital innovations will concurrently continue to streamline manual tasks and drive new levels of efficiency, visibility and accuracy, but can’t provide the consultative insights that an industry expert is uniquely equipped to deliver.
Managing a supply chain is all about balance, and every organization’s needs are unique. That’s why a successful strategy needs to remain rooted in helping businesses unlock the approach that enables growth.
Carmen Smith is chief people officer with Coyote Logistics.
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